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| Yesterday’s UK 100 Leaders | Close (p) | Chg (p) | % Chg | % YTD |
| Glencore | 387.15 | 15.5 | 4.2 | -0.7 |
| Royal Dutch Shell B | 2707.5 | 90.5 | 3.5 | 7.9 |
| Royal Dutch Shell A | 2609 | 85.5 | 3.4 | 5.2 |
| BP | 576.6 | 17.1 | 3.1 | 10.3 |
| Fresnillo | 1173 | 32 | 2.8 | -17.9 |
| Yesterday’s UK 100 Laggards | Close (p) | Chg (p) | % Chg | % YTD |
| Coca-Cola HBC | 2535 | -20 | -0.8 | 4.8 |
| Shire | 4066 | -22 | -0.5 | 4.3 |
| AstraZeneca | 5229 | -26 | -0.5 | 2.1 |
| Melrose Industries | 221.9 | -1.1 | -0.5 | 4.6 |
| Sage Group | 632 | -2.6 | -0.4 | -20.8 |
| Major World Indices | Mid/Close | Chg | % Chg | % YTD |
| UK UK 100 | 7,682.3 | 125.8 | 1.67 | -0.1 |
| UK | 21,010.0 | 280.9 | 1.35 | 1.4 |
| FR CAC 40 | 5,387.4 | 71.4 | 1.34 | 1.4 |
| DE DAX 30 | 12,579.7 | 67.8 | 0.54 | -2.6 |
| US DJ Industrial Average 30 | 24,581.0 | 119.3 | 0.49 | -0.6 |
| US Nasdaq Composite | 7,692.8 | -20.1 | -0.26 | 11.4 |
| US S&P 500 | 2,754.9 | 5.1 | 0.19 | 3.0 |
| JP Nikkei 225 | 22,361.5 | -155.4 | -0.69 | -1.8 |
| HK Hang Seng Index 50 | 29,082.1 | -256.6 | -0.87 | -2.8 |
| AU S&P/ASX 200 | 6,204.6 | -20.6 | -0.33 | 2.3 |
| Commodities & FX | Mid/Close | Chg | % Chg | % YTD |
| Crude Oil, West Texas Int. ($/barrel) | 68.40 | 0.34 | 0.51 | 13.8 |
| Crude Oil, Brent ($/barrel) | 74.24 | -0.35 | -0.47 | 11.4 |
| Gold ($/oz) | 1265.80 | -3.51 | -0.28 | -2.9 |
| Silver ($/oz) | 16.41 | 0.12 | 0.71 | -2.8 |
| GBP/USD – US$ per £ | 1.3248 | – | -0.14 | -1.9 |
| EUR/USD – US$ per € | 1.1646 | – | -0.07 | -2.9 |
| GBP/EUR – € per £ | 1.1375 | – | -0.03 | 1.1 |
Click graph to enlarge
UK 100 Index called to open -30pts at 7652, back from Friday’s 7696 highs in what looks like a new 1-week channel, towards the bottom of the recent 1-month sideways shift. Bulls need a break above 7673 overnight highs, Bears require a breach of 7632 overnight lows. Watch levels: Bullish 7673, Bearish 7632.
Calls for a negative open are driven by a negative start to the week in Asia with traders still reacting to the latest on the trade war front (Trump to restrict Chinese investment in US hi-tech, US tariffs on EU manufactured cars, China and Europe mulling retaliations). China’s PBOC has responded by cutting the RRR for banks (reserve requirement ratio), freeing up more than $100bn in new liquidity to cushion the Chinese economy from the impact of US imposed tariffs.
Demand for safe-haven assets has risen amid fresh fears about global trade, although gold remains hampered by a stronger USD (itself a safe-haven of sorts), as markets prefer the safety of the Japanese Yen and US Treasury bonds over the yellow metal. USD off Fridays low, albeit only by a hair, with corresponding minor GBP strength hampering the UK Index .
Weaker commodities (oil down sharply, metals mixed) providing a hindrance to UK Index Energy and Mining names. Oil weakness comes after major oil-producers agreed over the weekend to increase crude supply by enforcing full compliance of earlier production agreements (prohibiting production cuts beyond agreed amounts), allowing Saudi Arabia to pump more oil to make up for shortfalls elsewhere (Iran/Venezuela).
In corporate news this morning, Melrose Industries gets approval from US Committee on Foreign Investment for GKN merger; no unresolved national security concerns. Old Mutual announces 145p IPO offer price (vs. 125-155p range) for 9.6% of Wealth Management business Quilter (QLT, £2.7bn market cap, £231m proceeds). Starts trading on LSE and JSE today.
IWG confirms cash takeover approach from Terra Firma Investments. Synthomer announces refinancing via €300m 7yr bond and €300m 4yr revolving credit facility. Countrywide H1 trading subdued; cuts EBITDA guidance by £20m; to halve debt via equity finance (details 26 Jul). Avanti Communications signs $10m contract with ViaSat.
In terms of data today, this morning we have German IFO Surveys (9am), forecast mixed in June, with current reads a touch lighter (Business Climate lowest since May 2017) but expectations improving.
This afternoon, the Chicago Fed (1.30pm) is expected unchanged while US New Home Sales (3pm) rebound and the Dallas Fed Manufacturing Index (3.30pm) extends its own bounce towards the highs of the year.
Results this week can be expected from Carnival (this afternoon), Carpetright and Northgate (Tuesday), Whitbread (Wednesday), BCA Marketplace, Greene King, Hunting, John Wood Group, Stagecoach, Tullow Oil (Thursday) and newly named Reach (Ex-Trinity Mirror; Friday).
Major data of this week US: GDP, Inflation, House Prices & Pending Home Sales, Durable Goods Orders, Personal Income and Spending, Consumer Confidence Oil inventories; UK: GDP, Mortgage Approvals/Borrowing, Nationwide House Prices, Consumer Confidence; Eurozone: Inflation; China: Industrial Profits.
Thursday’s EU Summit will already test EU relationships on immigration/asylum, but also on Brexit while Wednesday’s Bank of England’s latest Financial Stability report comes just days after a surprisingly hawkish policy update, with Governor Carney speaking again.
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Prepared by Michael van Dulken, Head of Research