With Brent Crude and copper both down, and the commodity sector pulling back from yesterday’s levels, the FTSE was down 27 points in early trading. It could be hindered further this morning with UK inflation set to be in focus.
Spreadex Analyst, Connor Campbell added “Analysts are expecting the CPI reading to have remained at 2.9% in June; however, the figure has outperformed estimates for the last 4 months in a row, suggesting we could get another surprise this morning.”
“The Bank of England is so conflicted about what to do in regards to interest rates at the moment that a significant move in the inflation reading, be it up or down, could help push undecided MPC members in a hawkish or dovish direction ahead of the next meeting in early August.”
In FTSE corporate news this morning, the Royal Mail has posted a good start to the year with first quarter revenues up +1%. Other notable news is in from Carillion, Experian, British Land and Rio Tinto.
Over in Europe, today’s ZEW Survey release from the Eurozone will dictate the intra-day price action for the euro and expectations are set for a steady printing of the economic sentiment report. ADS Securities Analyst, Konstantinos Anthis commented “With the euro having broken above multi-months highs it will be key to see whether the single currency holds on to its gains ahead of the ECB meeting on Thursday.”
“Mario Draghi is expected to be pleased with the progress of the Euro area and attempt to prepare the markets for reduced stimulus from the ECB in the months to come so we expect the euro to trade with a positive bias going into the central bank’s meeting”
The US equity markets finished yesterday’s session virtually unchanged. Accendo Markets Analyst, Mike van Dulken suggested “the sinking of the Republican Healthcare Bill saw all major bourses pare early gains.”
“The Nasdaq was the only index to close above water, maintaining a seven session win streak as earnings remain in focus, while the S&P500 and Dow Jones retreated marginally from last week’s record highs as Trump-based sentiment took yet another hit.”
“US companies reporting today include Dow Constituents Goldman Sachs, IBM, Johnson & Johnson and UnitedHealth, while we also have Altaba (Yahoo!) reporting its maiden figures alongside the Bank of America and United Airlines owner United Continental.” he added