The FTSE 100 is fractionally higher this morning and it is holding above the 7400 mark.
The London market is still being assisted by the dovish comments from Ben Broadbent of the Bank of England yesterday.
The basic resources sector is benefitting from China’s strong trade data. The second largest economy in the world announced that imports increased by 17.2% and exports were up 11.3% in June. The market was expecting an increase of 13.1% and 8.7% respectively. The import numbers from the mineral hungry country is pushing up the share price of Rio Tinto, BHP Billiton, Glencore and Anglo American.
ASOS shares are lower on the day even though the online retailer revealed a 32% jump in sales for the four months until June. It’s good to see the company earning a bigger slice of its revenue stream outside of the EU and US, as diversification across different regions is important. The share price has been rising steadily since October 2014, so today’s pullback could entice fresh buyers.
The EUR/USD was recovering some of yesterday’s losses this morning but the revision lower of French inflation caused the single currency to drop. On a year-on-year basis it was revised to 0.9% from 1.4%, and it revised from 0.1% to 0.0% on a month-on-month basis. It’s worrying to see weak demand from the second largest economy in the eurozone.
We are anticipating the Dow Jones to open 24 points higher at 21,556, and we are calling the S&P 500 3 points higher at 2446.
Last night, the Beige Book report from the US showed that economic growth was ‘slight to moderate’ and wages were expanding at a ‘modest to moderate’ rate. The update echoed Fed Chair Janet Yellen comments yesterday that the economy is improving but nothing to get too excited about. Ms Yellen is due to testify at the Senate Banking Committee at 3pm.
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