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Market Briefing - UK markets finished in negative territory yesterday, dragged down by losses in mining sector stocks

Published: 17:19 14 Sep 2017 AEST

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UK Market Snapshot

UK markets finished in negative territory yesterday, dragged down by losses in mining sector stocks. Glencore, Anglo American and Antofagasta dropped 2.4%, 3.2% and 3.9%, respectively, following lower metals prices. Galliford Try declined 1.7%, after the housebuilder announced that it would quit bidding for large fixed-price infrastructure contracts as its pretax profit significantly fell for the year ended 30 June due to exceptional charge on legacy contracts. On the flipside, easyJet gained 0.7%, after the airline stated that it would start a new service which would allow its customers to book long-haul flights with other carriers through its website. Peer, International Consolidated Airlines Group added 0.4%. Balfour Beatty rose 0.1%, after the company sold its Blackpool Airport to Blackpool Council for £4.25 million. The FTSE 100 declined 0.3%, to close at 7,379.7, while the FTSE 250 fell 0.4%, to settle at 19,590.0.

US Market Snapshot

US markets finished higher yesterday, with the major indices closing at their record high levels for a second consecutive session, boosted by a rally in energy and consumer discretionary sector stocks. Oil majors, Exxon Mobil and Chevron advanced 0.3% and 1.5%, respectively, tracking gains in crude oil prices. Seadrill rallied 20.2%, after the company announced that it had filed for bankruptcy protection and agreed to a major restructuring plan with its senior lenders. Centene surged 8.0%, after the company agreed to acquire all assets of Fidelis Care for about $3.75 billion to expand its government-sponsored health care coverage to New York. Nordstrom jumped 6.0%, after a report indicated that the retailer is planning to take itself private. The S&P 500 gained 0.1%, to settle at 2,498.4. The DJIA rose 0.2%, to settle at 22,158.2, while the NASDAQ advanced 0.1%, to close at 6,460.2.

Europe Market Snapshot

Other European markets ended higher yesterday. Covestro jumped 6.4%, after Bayer, down 0.1%, cut its stake in the former by 9.4% and raised €1.2 billion from the same. Vivendi advanced 2.8%, following a broker upgrade on the stock to ‘Buy’ from ‘Neutral’. On the losing side, Eramet plunged 12.7%, after UniCredit and Intesa Sanpaolo, up 0.1% and 0.7%, respectively, sold their 11.2% stake in the company for €169.4 million. Cie Financiere Richemont declined 1.2%, despite reporting a rise in its sales in the five months to August. voestalpine slipped 0.4%, after Germany’s antitrust regulator initiated a raid at its headquarters following an investigation into suspected violations of antitrust laws. The FTSEurofirst 300 index marginally gained to close at 1,499.6. Among other European markets, the German DAX Xetra 30 rose 0.2%, to close at 12,553.6, while the French CAC-40 advanced 0.2%, to settle at 5,217.6.

Asia Market Snapshot

Markets in Asia are trading mostly higher this morning. Meanwhile, China’s industrial production slowed for a second consecutive month in August and retail sales rose less than expected in the last month. In Japan, Orix and Tokyo Electron have climbed 1.7% and 1.8%, respectively. Energy giants, Inpex and Japan Petroleum Exploration have gained 1.0% each, tracking overnight gains in crude oil prices. In Hong Kong, gaming stocks, Sands China, Melco International Development and Galaxy Entertainment Group have slipped 0.1%, 0.2% and 1.2%, respectively. However, cement maker, Anhui Conch Cement has gained 2.2%, on expectations that strained supply and a pickup in construction activity will drive up cement prices in the coming months. In South Korea, Apple suppliers, Samsung Electronics, SK Hynix and LG Display have advanced 0.9%, 1.1% and 2.6%, respectively. The Nikkei 225 index is trading marginally higher at 19,873.6. The Hang Seng index is trading 0.4% down at 27,793.7, while the Kospi index is trading 0.1% higher at 2,361.6.

Key Corporate Announcements Today

AGMs

Abzena, Arian Silver Corporation (DI), Colefax Group, Columbus Energy Resources, Datatec Ltd. (DI), Falcon Oil & Gas Ltd., JPMorgan Brazil Inv Trust, Miton UK Microcap Trust, Mobeus Income & Growth 2 Vct, Worldwide Healthcare Trust, Xafinity

EGMs

Colefax Group

Final Ex-Dividend Date

BCA Marketplace,Filta Group Holdings,Jupiter Green Inv Trust,Sophos Group,South32 LIMIted (DI),Trifast,UniVision Engineering Ltd.

Interim Ex-Dividend Date

888 Holdings,A&J Mucklow Group,Alpha Fx Group,BBA Aviation,Belvoir Lettings,Carr's Group,Centaur Media,Communisis,Computacenter,Costain Group,Derwent London,ECO Animal Health Group,Ediston Property Investment Company,Equiniti Group,F&C Managed Portfolio Trust Income Shares,Foresight VCT,Gocompare.com Group,Harworth Group,Henderson Diversified Income Ltd.,Highcroft Investment,Highland Gold Mining Ltd.,Holders Technology,Inmarsat,JPMorgan European Inv Trust Growth Shares,JPMorgan European Investment Trust,Lighthouse Group,Octopus AIM VCT 2,PPHE Hotel Group Ltd,Restaurant Group,RPS Group,Sanne Group,Standard Life Equity Income Trust,Stobart Group Ltd.,Tex Holdings,Total Produce,Xaar,Zotefoams

Interim Dividend Payment Date

4Imprint Group, Quartix Holdings

Quarterly Ex-Dividend Date

Assura, XP Power Ltd. (DI)

Trading Announcements

Booker Group, Safestore Holdings

 

Key Corporate Announcements for Tomorrow

AGMs

Aberdeen Private Equity Fund Ltd. Sterling Part Shares, Blenheim Natural Resources, Doric Nimrod Air One Ltd, Doric Nimrod Air Three Limited Red Ord Pref Shs Npv, Doric Nimrod Air Two Ltd Pref Shs Npv, Invesco Income Growth Trust, PetroNeft Resources, SVM UK Emerging Fund, Tungsten Corporation

EGMs

Federal Grid Company Of Unified Energy System, Public Joint-Stock Company GDR (Reg S), Public Joint Stock Company Polyus (REG S)

Final Dividend Payment Date

Ashtead Group, Greene King, Lazard World Trust Fund, London & Associated Properties, Severfield, Walker Crips Group

Interim Dividend Payment Date

Apax Global Alpha Limited, Berkeley Group Holdings (The), Chemring Group, GCP Infrastructure Investments Ltd, Hazel Renewable Energy VCT 1, Hazel Renewable Energy VCT 2, IMI, Informa, Maven Income & Growth 2 VCT, Maven Income & Growth 3 VCT, Maven Income & Growth 4 VCT, Maven Income and Growth VCT 5, North Midland Construction, Pearson, RM Secured Direct Lending, Securities Trust of Scotland, Synectics

Special Dividend Payment Date

Cambian Group

Quarterly Payment Date

BlackRock World Mining Trust, Canadian General Investments Ltd., Carnival

Quarterly Ex-Dividend Date

General Electric Co

Trading Announcements

SThree, Wetherspoon (J.D.)

 

Commodity, Currency & Bitcoin

Commodity

At 0330GMT today, Brent Crude Oil one-month futures contract is trading 0.25% or $0.14 lower at $55.02 per barrel. Yesterday, the contract climbed 1.64% or $0.89, to settle at $55.16 per barrel, reaching its highest level since 17 April, after a report from the International Energy Agency projected that global oil demand would climb by the most since 2015 this year and crude oil production across the world dropped for the first time in four months in August. Meanwhile, the Energy Information Administration reported that US crude inventories advanced by 5.9 million barrels for the week ended 08 September 2017.

At 0330GMT today, Gold futures contract is trading 0.11% or $1.50 higher at $1325.70 per ounce. Yesterday, the contract declined 0.35% or $4.60, to settle at $1324.20 per ounce, extending its losses for a third consecutive session, as a stronger US Dollar weighed on the the safe haven metal.

Currency

At 0330GMT today, the EUR is trading marginally lower against the USD at $1.1879. Yesterday, the EUR weakened 0.69% versus the USD, to close at $1.1885. Meanwhile, data showed that the Euro-zone’s industrial production rebounded in July, meeting expectations. Moreover, Germany’s consumer price inflation rose in line with market expectations in August. 

At 0330GMT today, the GBP is trading a tad lower against the USD at $1.3204, ahead of the Bank of England’s (BoE) interest rate decision, scheduled later today. Additionally, the US consumer price index (CPI) data for August and weekly initial jobless claims data, due later in the day, would be on investors’ radar. Yesterday, the GBP declined 0.54% versus the USD, to close at $1.3211, amid a disappointing report on UK’s wage growth for the three months to July. On the other hand, the nation’s unemployment rate unexpectedly declined to its lowest level in 42 years in the three months ended July.

Bitcoin

At 0330GMT today, BTC is trading 0.25% lower against the USD at $3845.73. Yesterday, BTC plunged 7.34% against the USD to close at $3855.52, after the National Internet Finance Association of China (NIFA) claimed that the financial and social risks associated with Bitcoin exchanges cannot be ignored and stated that Chinese Bitcoin exchanges do not have any legal foundation to operate within the country. Meanwhile, Russia’s Finance Minister, Anton Siluanov, commented that cryptocurrencies are needed to be regulated rather banned. In a major development, BitGo rolled out SegWit to all of its wallets.

 

Key Economic News

UK ILO unemployment rate surprisingly dropped in the May-July 2017 period

In the May-July 2017 period, the ILO unemployment rate fell unexpectedly to 4.30% in the UK, compared to a reading of 4.40% in the April-June 2017 period. Market anticipation was for the ILO unemployment rate to record a steady reading.

UK average earnings including bonus rose less than expected in the May-July 2017 period

In the May-July 2017 period, on a YoY basis, the average earnings including bonus in the UK recorded a rise of 2.10%, less than market expectations for an advance of 2.30%. The average earnings including bonus had registered a similar rise in the April-June 2017 period.

UK house price balance unexpectedly rose in August

In August, house price balance recorded an unexpected rise to 6.00 % in the UK, higher than market expectations of a fall to 0.00 %. In the prior month, house price balance had recorded a reading of 1.00 %.

UK claimant count rate steadied in August

In August, the claimant count rate remained flat at a level of 2.30% in the UK.

UK average earnings excluding bonus advanced less than expected in the May-July 2017 period

On an annual basis, the average earnings excluding bonus advanced 2.10% in the May-July 2017 period, in the UK, less than market expectations for a rise of 2.20%. The average earnings excluding bonus had registered a similar rise in the April-June 2017 period.

Number of unemployment benefits claimants in the UK declined in August

In the UK, number of unemployment benefits claimants fell by 2.80 K in August. Number of unemployment benefits claimants had recorded a revised decline of 2.90 K in the previous month.

Employment in the UK rose in the May-July 2017 period

Employment rose by 181.00 K in the UK, in the May-July 2017 period, higher than market expectations of an advance of 150.00 K. Employment had recorded a gain of 125.00 K in the April-June 2017 period.

Euro-zone industrial production rose less than expected in July

The working day adjusted industrial production in the Euro-zone registered a rise of 3.20% in July on a YoY basis, compared to a revised advance of 2.80% in the prior month. Market anticipation was for industrial production to climb 3.30%.

Euro-zone number of persons employed rose in 2Q 2017

In 2Q 2017, on a QoQ basis, the number of persons employed recorded a rise of 0.40% in the Euro-zone. In the prior quarter, the number of persons employed had recorded a revised rise of 0.50%.

Euro-zone industrial production rose as expected in July

The seasonally adjusted industrial production recorded a rise of 0.10% on a monthly basis in the Euro-zone in July, in line with market expectations. In the prior month, industrial production had registered a drop of 0.60%.

German wholesale price index climbed in August

In Germany, the wholesale price index climbed 3.20% in August on a YoY basis. The wholesale price index had advanced 2.20% in the previous month.

German wholesale price index advanced in August

In Germany, the wholesale price index climbed 0.30% in August on a MoM basis. The wholesale price index had fallen 0.10% in the prior month.

German CPI rose as expected in August

The final consumer price index (CPI) registered a rise of 1.80% on a YoY basis in Germany, in August, meeting market expectations. The CPI had risen 1.70% in the previous month. The preliminary figures had also indicated a rise of 1.80%.

German HICP rose as expected in August

In Germany, the final harmonised consumer price index (HICP) rose 0.20% on a MoM basis in August, in line with market expectations. The HICP had registered a rise of 0.40% in the previous month. The preliminary figures had also indicated an advance of 0.20%.

German CPI rose as expected in August

On a monthly basis in Germany, the final CPI advanced 0.10% in August, at par with market expectations. The preliminary figures had also recorded an advance of 0.10%. In the previous month, the CPI had risen 0.40%.

German HICP rose as expected in August

In Germany, the final HICP registered a rise of 1.80% on an annual basis in August, in line with market expectations. The preliminary figures had also recorded a rise of 1.80%. In the previous month, the HICP had advanced 1.50%.

Spanish HICP advanced as expected in August

In August, on a MoM basis, the final HICP in Spain registered a rise of 0.20%, in line with market expectations. The preliminary figures had also recorded an advance of 0.20%. In the previous month, the HICP had recorded a drop of 1.20%.

Spanish CPI rose as expected in August

The final CPI in Spain climbed 0.20% in August on a MoM basis, compared to a drop of 0.70% in the previous month. Markets were anticipating the CPI to climb 0.20%. The preliminary figures had also indicated a rise of 0.20%.

Spanish CPI rose as expected in August

The final CPI in Spain climbed 1.60% in August on an annual basis, compared to a rise of 1.50% in the prior month. Market expectation was for the CPI to advance 1.60%. The preliminary figures had also indicated a rise of 1.60%.

Spanish HICP advanced as expected in August

The final HICP in Spain advanced 2.00% in August on an annual basis, in line with market expectations. The preliminary figures had also indicated an advance of 2.00%. In the prior month, the HICP had recorded a rise of 1.70%.

Swiss producer and import price index advanced more than expected in August

In August, on a MoM basis, the producer and import price index registered a rise of 0.30% in Switzerland, more than market expectations for an advance of 0.20%. The producer and import price index had registered an unchanged reading in the prior month.

Swiss producer and import price index advanced more than expected in August

In August, the producer and import price index recorded a rise of 0.60% in Switzerland on an annual basis, compared to a fall of 0.10% in the previous month. Market anticipation was for the producer and import price index to climb 0.40%.

US producer price (ex-food & energy) rose less than expected in August

On an annual basis, producer price (ex-food & energy) recorded a rise of 2.00% in August, in the US, compared to an advance of 1.80% in the previous month. Markets were expecting producer price (ex-food & energy) to advance 2.10%.

US mortgage applications rose in the last week

On a weekly basis, mortgage applications climbed 9.90% in the US, in the week ended 08 September 2017. In the prior week, mortgage applications had registered a rise of 3.30%.

US budget deficit expanded in August

Budget deficit in the US widened to $107.70 billion in August, compared to market expectations of a budget deficit of $119.50 billion. The US had registered a budget deficit of $42.90 billion in the previous month.

US producer price advanced less than expected in August

On an annual basis, producer price in the US advanced 2.40% in August, less than market expectations for a rise of 2.50%. Producer price had climbed 1.90% in the previous month.

US producer price rose less than expected in August

On a monthly basis, in August, producer price recorded a rise of 0.20% in the US, lower than market expectations for a rise of 0.30%. In the previous month, producer price had recorded a drop of 0.10%.

US producer price (ex-food & energy) rose less than expected in August

On a MoM basis, producer price (ex-food & energy) rose 0.10% in August, in the US, compared to a fall of 0.10% in the previous month. Market anticipation was for producer price (ex-food & energy) to rise 0.20%.

Canadian house price index rose in August

On a monthly basis, the house price index in Canada recorded a rise of 0.60% in August. The house price index had advanced 2.00% in the prior month.

Japanese investors became net buyers of foreign stocks in the previous week

Japanese investors remained net buyers of ¥306.10 billion worth of foreign stocks in the week ended 08 September 2017, as compared to being net buyers of ¥161.40 billion worth of foreign stocks in the previous week.

Foreign investors became net sellers of Japanese stocks in the previous week

Foreign investors remained net sellers of ¥644.60 billion worth of Japanese stocks in the week ended 08 September 2017, from being net sellers of a revised ¥158.10 billion worth of Japanese stocks in the prior week.

Japanese investors turned net buyers of foreign bonds in the previous week

Japanese investors turned net buyers of ¥198.70 billion worth of foreign bonds in the week ended 08 September 2017, as compared to being net sellers of a revised ¥117.40 billion worth of foreign bonds in the previous week.

Foreign investors remained net buyers of Japanese bonds in the previous week

Foreign investors remained net buyers of ¥555.80 billion worth of Japanese bonds in the week ended 08 September 2017, as compared to being net buyers of a revised ¥1379.80 billion worth of Japanese bonds in the previous week.

Chinese retail sales (YTD) advanced as expected in August

Retail sales (YTD) in China recorded a rise of 10.40% in August on an annual basis, in line with market expectations. In the prior month, retail sales (YTD) had registered a similar rise.

Chinese industrial production rose less than expected in August

In August, on an annual basis, industrial production in China rose 6.00%, lower than market expectations for an advance of 6.60%. Industrial production had recorded a rise of 6.40% in the previous month.

Chinese industrial production (YTD) rose less than expected in August

On an annual basis, industrial production (YTD) in China advanced 6.70% in August, lower than market expectations for a rise of 6.80%. In the previous month, industrial production (YTD) had risen 6.80%.

Chinese fixed assets investment excl. rural YTD rose less than expected in August

Fixed assets investment excl. rural YTD in China registered a rise of 7.80% on an annual basis in August, compared to an advance of 8.30% in the prior month. Markets were expecting fixed assets investment excl. rural YTD to climb 8.20%.

Chinese retail sales rose less than expected in August

In August, retail sales in China rose 10.10% on a YoY basis, compared to an advance of 10.40% in the prior month. Market anticipation was for retail sales to climb 10.50%.

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