It has been a subdued session in Europe. 

Europe

The FTSE is largely unchanged on the day, while the DAX and CAC 40 are in positive territory. Mario Draghi, the head of the European Central Bank, said the bank would hold-off on hiking rates if needed. The currency bloc is slowing down and Mr Draghi is doing what he can to try and assist the area. The comments were not a major surprise given that the ECB recently announced plans to launch a new targeted lending scheme in September.

Debenhams shares soared today after Mike Ashley made an offer of 5p per share for the remaining shares he doesn’t own in the company. The bid also comes with the condition that he will be installed as CEO. Mr Ashley is keen is to protect his original investment in the group, and he would ideally like to be in charger of the turnaround plan too. Today’s bid by Mr Ashley comes shortly after he offered the company an interest-free loan of £40 million. The struggling retailer has been trying to secure additional funding, but it might come at the cost of wiping out shareholder value. The board of Debenhams should he looking after the interests of shareholders, regardless of how they feel about Mr Ashley.

Bellway posted respectable first-half results. Revenue and pre-tax profit increased by 12.4% and 8.7% respectively. House completions edged up by 5.6%, but the operating margin rate slipped by 70 basis points to 21.5% - the firm cited higher costs for the squeezed margins. The company slashed its debt position by 79.7%, which should make the company leaner, but it is taking a ‘cautious approach’ to acquiring land on account of Brexit.

Imperial Brands announced that it expects full-year net revenue to match, or even exceed the upper end of their forecast. The firm anticipates revenue growth of between 4% and 8%, and while the forecast was for growth of between 1% and 4%. The company has invested in the vaping sector, and it is keeping a close eye the US regulator’s procedures and comments in relation to the vaping industry, as the government body has expressed concern about the rise in vaping by teenagers. Imperial Brands are committed to ensuring their products are not sold to minors.  

US

The major indices are a little in the red as the fears of a recession are still lingering on Wall Street. The inverted yield curve has rattled some investors as it has been a reliable warning of a recession. The US trade deficit has dropped to $51.1 billion, from $59.9 billion, and that is likely to be well received by President Trump as he is keen to rebalance the US’s trading relationship with the rest of the world.

Lennar shares are higher today even though the company’s first-quarter earnings missed expectations. Adjusted EPS came in at 74 cents, while equity analysts were expecting 75 cents New Orders jumped by 23.7% to 10,464, topping the forecast of 10,385. Gross margin edged up to 20.1%, from 19.5%.

Southwest airline lowered its revenue forecast due to grounding of Boeing 737 Max planes. The firm previously expected operating revenue per seat mile to grow by between 3% and 4%, and now it expects growth to be between 2% and 3%   

FX

GBP/USD is a little higher ahead of the indicative voting that will take place at Westminster later today. MP’s will vote a series of issues, and even though it is not legally binding, it should give lawmakers an opportunity to map out what they actually want, because we know what they don’t want.

EUR/USD is a little weaker after the comments from Mario Draghi. The central banker’s comments weren’t much of a surprise given that the eurozone is deteriorating. The wider move higher in the greenback has hurt the single currency.

Commodities

Gold is lower today as the firmer US dollar is hurting the metal. The two markets have had a strong inverse relationships in recent months and that is playing out today. Even though the commodity has lost ground today, the wider upward trend that has been in place since November is still intact.

Oil saw a jump in volatility in the wake of the Energy Information Administration report being announced. US oil stockpiles jumped by 2.8 million barrels while traders were expecting a draw of 1.2 million barrels. Gasoline inventories declined by 2.88 million, broadly in line with expectations.

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