With speculation again mounting that the Fed will begin to taper their asset purchase programme from September, traders will be watching carefully this afternoon as US inflation and employment data hit the newswires at 13.30.The reality of the situation is that even if the fed made a definitive announcement on the timescale for pulling back from bond purchases, any immediate market reaction would be guesswork at best – tapering does not mean an end to asset purchases. The speed and scale of any would-be tapering are the relevant factors for investors to consider, and until we have confirmation of these details everything else is just noise…
In the UK the uptick in economic data continues unabated, with Retail Sales smashing forecasts on the monthly and annual measure
. A 3% year-on-year rise sees cable testing the 1.56 level for the first time since June despite Mr Carney’s pledge to keep rates at their record lows for the foreseeable future.
Back on the equities front Imperial Tobacco
lead the FTSE
, up over 2.5% after delivering results not as bad some analysts had feared
and sparking what Exane describe as a ‘relief rally’ to drag the stock off almost 2-year lows.
In the midcap space AZ Electronic Materials
suffered a sharp drop at the open before recovering some ground as the market digested comments from the group suggesting that their market share gains in optronics in Japan may not be sustainable. Suggestions of only ‘modest’ revenue growth in H2
also weighed, though the headline EPS beat helped erase much of the damage, with the stock down just 2%, 23p off its 285 intraday low.
Energy exploration group Ophir
are testing their lows of the year, down around 10% after announcing a H1 loss of almost $20m on exploration expenditure
. Brokers at Oriel maintain their ‘buy’ rating despite the potential for further weakness in the short term…
With half of Europe on holiday today volumes are likely to be thin even by August standards, though clients continue to take the opportunity to trade intraday volatility as equity indices have remained relatively range bound.CMC Markets is an execution only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.