It is a quiet day in European equity markets as the US markets will remain shut on account of a public holiday. 

Europe

Trading volumes and market volatility are low as many traders on this side of the Atlantic are sitting on their hands. Today’s movements are not a good reflection of wider the market sentiment, but keep in mind that the FTSE 100 and the DAX reached 10-month highs yesterday. Dealers are likely to be coaxed off the fence tomorrow when the US will release the latest non-farm payrolls report.     

William Hill shares are slightly higher this afternoon after the company revealed it will close up to 700 stores, and that would roughly put 4,500 jobs at risk. The gaming company said the tighter restrictions on fixed odds betting was the reason behind the announcement. The government capped the maximum bet on fixed odds betting terminals (FOBT) at £2, while the previous cap was £100. The firm confirmed that the drop in gaming machine revenue was ‘significant’. William Hill derives nearly 40% of its total revenue from online revenue, and it has a small, but growing operation in the US. It is possible the group is keen to use funds from the UK operation, to help funds the expansion of its US business, and the raise its online profile.

Persimmon shares are slightly in the red after the company posted a mixed update. Housing revenue for the first-half slipped by 5.6%. The average selling price ticked higher, while the number of legal completions slipped by 6%. The company will have a greater focus on quality and customer services, and it expects full-year operating margin to be 30.8%. 

Associated British Foods issued a positive update. The group said that sales, excluding sugar, for the 40 weeks until late June was up 3% on the year, and Primark sales were up 4%. The division saw a drop in like-for-like sales, but selling prices rose and that helped off-set the dip in the number of items sold. 

Saga Group shares have rallied today, and it was reported yesterday that Setanta Asset Management upped its stake in the firm from just over 7% to slightly over 8%.      

US

The New York Stock Exchange is closed today as the US celebrates Independence Day.

FX

Volatility on the currency markets have been low on account of the US public holiday. The US dollar index has barely moved and there hasn’t been much in the way of news in Europe today. The only economic announcement that was remotely important this morning, was the eruozone retail sales report, which showed a 0.3% decline in May. The news had little impact on EUR/USD, and GBP/USD is broadly flat on the day.  

Commodities

Gold is in the red, but it is comfortably above the $1,382 mark, and while it holds above that metric it is likely to remain in the wider bullish trend that has been in place since May. If gold breaks above the $1,439 mark it might pave the way for $1,485 to be tested.

Oil has slipped today as the smaller than expected drop in US stockpiles yesterday is playing on traders’ minds, and in light of some of the underwhelming economic reports during the week, traders are concerned about global demand. US oil inventories fell by over 1 million barrels, which the consensus was for a drop of nearly 3 million barrels. The manufacturing reports from China, Germany and the US this week were soft, and that points to weak demand.

 

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