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| Friday’s UK 100 Leaders | Close (p) | Chg (p) | % Chg | % YTD |
| Anglo American | 1117 | 23.0 | 2.1 | -3.7 |
| Micro Focus International | 2089 | 40.0 | 2.0 | -4.1 |
| Fresnillo | 1481 | 23.0 | 1.6 | 21.3 |
| Randgold Resources | 6870 | 90.0 | 1.3 | 7.1 |
| Mediclinic International | 750.5 | 9.5 | 1.3 | -2.7 |
| Friday’s UK 100 Laggards | Close (p) | Chg (p) | % Chg | % YTD |
| Barratt Developments | 585.5 | -15.0 | -2.5 | 26.6 |
| Royal Mail Group | 401 | -10.0 | -2.4 | -13.2 |
| Associated British Foods | 2855 | -60.0 | -2.1 | 4.0 |
| Merlin Entertainments | 469.4 | -9.6 | -2.0 | 4.6 |
| Provident Financial | 2255 | -45.0 | -2.0 | -20.9 |
| Major World Indices | Mid/Close | Chg | % Chg | % YTD |
| UK UK 100 | 7,378.4 | -35.1 | -0.47 | 3.3 |
| UK | 19,408.4 | -9.9 | -0.05 | 7.4 |
| FR CAC 40 | 5,235.3 | -0.1 | 0.00 | 7.7 |
| DE DAX 30 | 12,631.7 | -9.6 | -0.08 | 10.0 |
| US DJ Industrial Average 30 | 21,637.8 | 84.8 | 0.39 | 9.5 |
| US Nasdaq Composite | 6,312.5 | 38.0 | 0.61 | 17.3 |
| US S&P 500 | 2,459.3 | 11.4 | 0.47 | 9.9 |
| JP Nikkei 225 | 20,118.9 | 19.1 | 0.09 | 5.3 |
| HK Hang Seng Index 50 | 26,535.1 | 145.9 | 0.55 | 20.6 |
| AU S&P/ASX 200 | 5,763.9 | -1.2 | -0.02 | 1.7 |
| Commodities & FX | Mid/Close | Chg | % Chg | % YTD |
| Crude Oil, West Texas Int. ($/barrel) | 46.66 | 0.37 | 0.8 | 5.2 |
| Crude Oil, Brent ($/barrel) | 49.05 | 0.40 | 0.83 | 4.6 |
| Gold ($/oz) | 1230.05 | 2.05 | 0.17 | 1.5 |
| Silver ($/oz) | 16.01 | 0.06 | 0.39 | 2.9 |
| GBP/USD – US$ per £ | 1.3092 | – | 0 | 1.7 |
| EUR/USD – US$ per € | 1.1460 | – | -0.04 | 0.6 |
| GBP/EUR – € per £ | 1.1424 | – | 0.04 | 1.0 |
Click graph to enlarge
UK 100 Index called to open +10pts at 7390, holding above its 7380 pivot of the last week, but yet to venture north of 7400 this morning. Bulls require a breakout above 7405 to trigger another up-leg to surpass last week’s 7430 highs. Bears need a break below 7380 to open the door for a potential bearish pennant towards 7330 rising support. Watch levels: Bullish 7405, Bearish 7385.
Calls for a mildly positive open come after gains for US equities on Friday and despite a down day in Asia to kick off the new trading week. Buoying UK sentiment is oil holding rebound highs and copper spiking after fresh better-than-expected China GDP data put it in-line for re-acceleration of growth in 2017. This after six years of slowing, suggesting successful management of stimulus.
Whilst GBP may be off its 10-month highs versus USD, beware strength representing a drag on UK blue-chips. The UK currency remains strong versus EUR ahead of UK inflation prints and more Brexit negotiations.
UK Index corporate news this morning includes easyJet CEO Carolyn McCall taking the top job at ITV. Utility Centrica has agreed to combine its European oil and gas exploration and production business with Bayerngas Norge to form a newly incorporated joint venture. Weir Group says its oil division performance should be ahead of expectations thanks to recovery in the North American oil sector.
After a tough week, Carillion’s JV partnership with Eiffage and Kier have been awarded two HS2 contracts worth £1.4bn. Balfour Beatty, along with 50/50 partner Vinci, is to be awarded two contracts by HS2, worth a combined £2.5bn.
Japan’s Nikkei is closed for a public holiday, while China stocks are negative but off their lows thanks to upbeat GDP. Australia's ASX flat to lower in spite of commodity price gains, AUD strength weighing after disappointing US data added to a less hawkish Fed Yellen. This cut the odds of a US rate hike, sending the USD lower and AUD to 14-month highs, presenting a hindrance to exporters.
US equity markets closed at record highs on Friday as Q2 earnings season kicked off. Despite a mixed performance from banking giants JPMorgan, Citi and Wells Fargo (earnings beat, trading revenues miss), both the Dow Jones and S&P500 rallied as investors envisage a strong quarter for US companies. The Nasdaq was the only major bourse not to notch a record closing high, however saw its best weekly performance since November.
Crude Oil prices remain around 10-day highs as the US dollar trades a 10-month low and investors unwind some short bets in the face of higher than expected demand. This comes as markets continue to digest the supply tug-of-war between OPEC and US shale producers which has plagued the market throughout much of 2017. Global benchmark crude is holding around $49 while its US counterpart remains above $46.50.
Gold has held onto its sharp gains from Friday as the US dollar traded a fresh 10-month low overnight. After a weaker than expected US inflation print on Friday, markets are now pricing in only one further rate hike from the US Fed this year, which has subsequently lifted the non-yielding safe-haven asset above $1230 for the first time in two weeks, while greenback weakness lowers the relative price of the precious metal.
In focus today will be June final Eurozone Consumer Price Inflation (CPI), expected to confirm no change since May’s second deflationary foray of 2017. Annually, CPI is seen a touch lower in June (1.3% vs 1.4% prev.) after May’s drop from near 2017 highs (1.9%), although the core metric (1.1% vs 0.9% prev.) may deliver a welcome rebound close to 2017’s 4-year highs (1.2%), even if this remains uncomfortably shy of the ECB’s target of “below, but close to, 2%”.
Other events this week include another round of Brexit negotiations, likely to centre on citizens' rights and outstanding obligations. Earnings season continues stateside with Bank of America, Goldman Sachs and Morgan Stanley updating tomorrow and Alcoa on Thursday. UK inflation tomorrow could add to hawkish pressure on the Bank of England. Thursday’s ECB policy update will be looked to for the updated appraisal on the region and any hints about QE taper timing.
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