The talking point in the dealing rooms was Donald Trump’s sudden sacking of FBI director James Comey, but the actual effect on the market was rather more limited. In Europe shares moved higher, and there was a similar story in the UK, while the decline in the US was fairly muted. An initial drop in the dollar did not last, and the pound’s move higher towards $1.30 was soon nipped in the bud as dealers looked forward to the Bank of England meeting on Thursday, expected to be fairly dovish. So the final scores showed:

• The FTSE 100 finished up 43.03 points or 0.59% at 7385.24
• Germany’s Dax rose 0.07% to 12,757.46
• France’s Cac closed 0.05% higher at 5400.46
• Italy’s FTSE MIB ended 0.31% better at 21,552.81
• But Spain’s Ibex dipped 0.13% to 11,034.8
• In Greece, the Athens market closed higher for the twelfth day in a row, up 1.75% at 791.97

On Wall Street, the Dow Jones Industrial Average is currently down around 20 points or 0.1%.

On that note, it’s time to close for the evening. Thanks for all your comments, and we’ll be back tomorrow.

Brent crude is now above $50 a barrel and on course for its best day since 1 December.

It has jumped more than 3% to $50.27 in the wake of the bigger than expected drop in US crude stocks. West Texas Intermediate is currently up 3.44% at $47.46 a barrel.

Oil prices are moving higher following news of a bigger than expected decline in US crude stocks last week.

They fell by 5.25m barrels to 522.53m, according to the Energy Information Administration, much higher than the forecast 1.8m decline. However gasoline stocks slipped by less than expected.

But signs of increasing demand at a time when producers are struggling to contain supplies - Opec’s cutbacks are being countered by rising US shale production - have lifted crude prices. Brent is up 2.2% at $49.81 a barrel while West Texas Intermediate has added a similar amount to $46.89.

The EIA figures followed a report from the American Petroleum Institute on Tuesday showing a bigger than expected fall of 5.8m barrels last week compared to forecasts of a 2m barrel reduction. The news saw crude prices rally initially. However, gains were capped due to news of a large build in gasoline stockpiles.

As expected following the news that FBI director James Comey had been “terminated” by President Trump, US stock markets have slipped back a little.

But the falls are not dramatic, with the Dow Jones Industrial Average down around 50 points or 0.24%, the Nasdaq Composite just 0.03% lower and the S&P 500 off 0.06%.

Over in Greece, it appears that the International Monetary fund will finally sign up to the economic adjustment programme keeping debt-striken Greece afloat. Helena Smith reports from Athens:

As financial rows go, it was one of the longest, most ill-kept secrets of all times. But now it seems the spat between the EU and IMF over how to deal with debt-stricken Greece finally has been put to rest with the latter agreeing to participate in the country’s latest bailout programme. Attending the EBRD’s annual meeting in Nicosia, Slovakia’s ever-loquacious finance minister Peter Kazimir said that, thanks to the Washington-based organisation’s managing director Christine Lagarde, the IMF board had decided to join the programme.

“It seems to me that yes, finally (the IMF will provide funding to Greece),” he said. “We have to congratulate Christine Lagarde that she managed to convince the IMF. This amount is not important, (but) it is really symbolic. Technically the IMF must be on board.”

Germany had argued that without the IMF actively monitoring the programme, it would have trouble convincing the Bundestag to approve of further disbursement of loans. The IMF had countered that it would not sign up to the €86bn programme – the third since Greece’s near-economic implosion in late 2009 – until Athens’ staggering debt load was made sustainable. At 180% of GDP, the debt pile is by far the highest in the EU with the IMF saying that longer grace periods and maturity extensions are only likely to throw the problem into the long grass.

But analysts now believe there are signs euro area finance ministers will revise Greece’s post-programme primary surplus in its debt sustainability analysis which would pay the way to minimal debt relief in 2018 – allowing the IMF to come on board either at the next May 22 eurogroup meeting or by mid June at the latest.

That, in turn, would allow emergency loans to be drawn down from the programme so that a fresh Greek crisis is avoided in July when Athens must honour debt repayments of over €7bn mostly to the ECB.

European Central Bank president Mario Draghi is addressing the Dutch parliament now, and dismissing criticism of his actions as Europe’s top central banker.

He starts by explaining how the ECB took “decisive policy action” when the eurozone debt crisis struck, by slashing interest rates to zero, imposing negative rates on banks, and buying tens of billions of euros of bonds each month.

It worked, Draghi says, because:

Since the start of 2013, inflation had drifted consistently away from the ECB’s target rate of below but close to 2% over the medium term, reaching levels below 1%.

Without counteracting measures, this low inflation could have turned into a deflationary spiral which would have deepened our economies’ woes considerably.

Instead, we now see rising growth and inflation heading towards target:

But...what about Europe’s savers, who have seen returns collapse? Draghi sweeps these worries aside...

An accommodative monetary policy means households accrue fewer nominal returns on their savings. However, an accommodative policy supports the economic recovery, which in turn bolsters employment, income, returns on investment and tax revenues.

It therefore benefits households in their capacity as workers, entrepreneurs, investors, borrowers and taxpayers.

Draghi also argues that banks shouldn’t grumble; OK, their profitability may suffer from low rates, but they’re also spared rising delinquencies and defaults.

And no Draghi speech is complete without a warning to Eurozone politicians to implement “ambitious, country-specific, structural reforms”.

Here’s the full quote from Barclays CEO Jes Staley about the impact of Brexit on its operations, from today’s AGM meeting:

While on the subject of the Investment Bank, I want to briefly touch on the question of ‘passporting’ and how the Brexit vote might affect our European operations, because I know that is of interest to shareholders.

The first thing to say is that we see this as a wholly manageable challenge.

Our investment banking activities in Europe are certainly important to Barclays, and to our strategy, and we are committed to remaining a strong participant in that marketplace.

To be clear, we believe the development of a single market for financial services in Europe, with the full participation of banks based in the UK, remains the best option for the UK economy and the best option for the European Union economy.

Nevertheless, we recognise that there are a range of possible outcomes of the negotiations in the next 23 months, and we have looked closely at our options as to what we would do in various scenarios. We are confident that we have multiple choices for how we might continue to serve our customers and clients regardless of the outcome.

But I have to say that compared to the complexity of standing up our US Intermediate Holding Company, as we did on July 1st of last year, let alone establishing a ring-fenced bank in the UK from scratch, as we are currently doing, any of the options we might need to pursue are by comparison straightforward, and significantly less costly.

Finally, we do not currently see a need in our options to shift British jobs or significant operations elsewhere. If we require a build-up of capability in another European Union jurisdiction as part of our plans then we can do so, and we will.

James Comey’s sacking isn’t entirely without precedent; Bill Clinton fired FBI director William Sessions in 1993 following a critical report into Sessions’ performance and conduct.

But Comey’s abrupt exit may remind older readers of another incident - the notorious Saturday Night Massacre of October 1973. That was the moment Richard Nixon had special prosecutor Archibald Cox fired, rather than hand over Oval Office recordings to the inquiry into the Watergate burglary.

Cox’s dismissal only occurred after the attorney general and his deputy resigned rather than obey Nixon, and is a textbook example of elected politicians interfering in the judicial process (Nixon’s subsequent resignation is a reminder that it doesn’t always work out either....)

My colleague Julian Borger has written about the comparisons with Watergate here:

Jasper Lawler of London Capital Markets says memories of the Saturday Night Massacre are weighing on investors today, as they digest the news that Trump has fired the man investigating his advisor’s ties with Russia.

He told Sky News that:

Markets don’t want Donald Trump to have his own Watergate scandal. This very much reminds us of Nixon firing Cox....

Anything that can upset the reflation trade, the infrastructure spending, the tax cut that Trump is trying to get through is not good for markets

Having a big political scandal would be one thing that could disrupt that.

James Comey’s sudden dismissal last night has stunned US politicians from across both parties, with some calling for a special prosecutor to investigate links between Donald Trump’s allies and Russia.

This means it is a serious issue for investors too, as UBS analyst Paul Donovan explains:

Ordinarily the dismissal would not matter to markets, but the move might be regarded as further evidence of presidential unpredictability (which markets dislike).

It may impact relations with Congress, and relations with Russia; both have market relevance.

Without Congress’s support, Trump will struggle to deliver his promised infrastructure spending boost, or push through his controversial tax reforms.

Mike Van Dulken of Accendo Markets says the US president has “thrown another spanner into the works”.

This could impact approval of the stimulus policy markets are hankering after.

Bart Wakabayashi, branch manager for State Street Bank and Trust in Tokyo, says Asian traders were unnerved by the news:

“The Comey news is being treated as a risk-off event, and the headlines were sparking the dollar’s move down.”

The US dollar is coming under pressure this morning after Donald Trump shocked America, and beyond, by firing the director of the FBI.

The sudden dismissal of James Comey has given the markets a jolt, with some analysts citing it as an example of Trump’s erratic approach.

The dollar is down against the pound, sending sterling up to $1.298. The selloff has also sent the euro back towards $1.09. Emerging market currencies, such as the South African rand, are also benefitting.

Trump told Comey yesterday that he was fired over his handling over Hillary Clinton’s emails, and that the FBI needed new leadership.

But as we reported last night, the move has also intensified the focus on Russia’s activities around the US election:

The move came as CNN reported that a grand jury had begun issuing subpoenas to associates of Michael Flynn, the former national security adviser at the centre of the ongoing probe of Russian meddling in last year’s presidential election. If confirmed, the report suggests that the FBI’s investigation into the Trump camp’s links with Moscow has entered a significant new phase.

Comey’s sacking, which was condemned by one Senate Democrat as “Nixonian”, raised concerns over the independence of the investigation and prompted vociferous demands for a special prosecutor to be appointed.

RBC Capital Market believes the move will weigh on Wall Street when trading begins later today.

Donald Trump “terminated” FBI Director James Comey, calling for a “new beginning”. US stock futures slipped as a result.

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

World stock markets are hovering around record highs today, as traders continue to take comfort from the French election result

But what will Emmanuel Macron’s victory mean for Europe’s economy? We’ll find out what Mario Draghi, head of the European Central Bank, thinks when he testifies to the Dutch parliament around noon today.

Konstantinos Anthis of ADS Securities believes Draghi could push the euro higher.

In the past Mario Draghi has been overly optimistic about the growth prospects of the Euro area but today improvements in the data may support his view.

From Sunday the European currency has dropped from its 1.1000 heights to trade as low as 1.0870, so his speech may be a trigger for some of these losses to be recovered.

Investors are also wondering whether the market rally can keep going. Last night, tech giant Apple became the first company to ever be worth $800bn - putting it on track for a $1 trillion market cap before the year is out.

And earlier today, the Hong Kong Hang Seng index broke through the 25,000-point mark on Wednesday for the first time in nearly two years.

European markets are expected to be calm this morning:

Market volatility has fallen to its lowest levels since 1993, a sign of optimism – and possibly complacency – seeping across the trading floors. Last night’s shock sacking of FBI director James Comey has served as as reminder that shocks are always around the corner...

We’ll be tracking all the main events through the day....