Equity markets in Europe have been broadly edging lower in the past few months and today is no different.
Overnight in Asia, we saw a slight fall in equities as the Caixin survey of Chinese services grew at a slower rate than expected, and that gave trades an excuse to sell. The reading was 51.5, and economists were anticipating 51.9, while June’s figure was 51.6. The cooling of the growth rate didn’t give dealers are reason to remain long.
Shares in London Stock Exchange are one of the best performers on the FTSE 100 this morning, after the company had a positive start to the year. First-half operating profits increased by 19.5% and the interim dividend was upped by 14.4%.The share price has been climbing steadily for several years, and there is no sign of a turnaround on the horizon.
The GBP/USD was boosted by the growth in the UK services sector in July. The Services PMI report came in at 53.8, and ticked up from 53.4 in June. The pound traded through $1.3260 on the back of it.
At 12pm the Bank of England will reveal its decision on interest rates and the stimulus package, and dealers are expecting no change in policy. The voting breakdown will be in focus, and two of the eight members are tipped to vote in favour of a rate hike. Andy Haldane has expressed hawkish views in recent weeks so could put his money where his mouth is, and make it three votes in favour of a hike.
The BoE inflation report will also be announced at 12pm, and keep in mind that inflation cooled to 2.6% in June, from 2.9% in May.
Mark Carney, the Governor of the Bank of England, will hold a press conference in 12.30pm, and even though Mr Carney has flipped flopped on his stance, by-and-large he has been dovish lately.
We are anticipating the Dow Jones to open 25 points lower at 21,991, and we are calling the S&P 500 down 5 at 2472.
At 1.30pm the US will announce the jobless claims report, and the consensus is for 242,000, and that compares with last week’s reading of 244,000. The ISM non-manufacturing report will be released at 3pm, and traders are anticipating a reading of 57 for July, and that wold be a slight slowdown from 57.4 in June.
Kraft Heinz will report their second-quarter figures later today.
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