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Morning Report

UK 100 Leaders Close Chg % Chg % YTD
British American Tobacco PLC 3243 89 2.8 6.14
United Utilities Group PLC 707.5 19 2.8 16.75
Diageo PLC 1718 34.5 2 22.15
Imperial Tobacco Group PLC 2362 44 1.9 -3
Bunzl PLC 1103 15 1.4 24.77
Reckitt Benckiser Group PLC 3627 47 1.3 14.06
Severn Trent PLC 1708 18 1.1 14.17
Vodafone Group PLC 175.4 1.75 1 -1.96
UK 100 Laggards Close Chg % Chg % YTD
Aviva PLC 344.9 -14.3 -4 14.66
GKN PLC 228.3 -8.6 -3.6 24.75
ICAP PLC 338.1 -12.2 -3.5 -2.54
IMI PLC 931.5 -30.5 -3.2 22.57
BP PLC 438.95 -12.55 -2.8 -4.68
Royal Bank of Scotland Group (The) PLC 267.1 -7.3 -2.7 32.36
Lloyds Banking Group PLC 38.855 -0.995 -2.5 49.99
Kazakhmys PLC 742 -18.5 -2.4 -19.96
Major World Indices Mid/Close Chg % Chg % YTD
UK 100 5868.16 -25.36 -0.43 5.31
11933.7 -147.18 -1.22 18.12
CAC 40 3512.69 -41 -1.15 11.17
DAX (Xetra) 7347.69 -56 -0.76 24.57
Dow Jones Industrial Average 13564.6 11.5 0.08 11.03
Nasdaq Comp. 3177.8 -0.87 -0.03 21.98
S&P 500 1459.32 -1.87 -0.13 16.04
Nikkei 225 9232.21 108.44 1.19 9.19
Hong Kong Hang Seng Index 20832.72 230.79 1.12 13.01
S&P/ASX 200 4418.4 23.67 0.54 8.92
Commodities & FX Mid/Close Chg % Chg % YTD
Crude Oil Light Sweet Composite 95.93 0.4 0.42 -3.1
Gold Composite 1778.15 6.15 0.35 13.52
Silver Composite 34.8875 0.1375 0.4 25.61
Palladium Composite 674.875 6.875 1.03 2.75
Platinum Composite 1639.75 10.15 0.62 17.03
GBP/USD – US $ per £ 1.6257 0.08 4.68
EUR/USD – US$ per Euro 1.3074 0.21 0.93
GBP/EUR – Euros per £ 1.2435 -0.12 3.64
UK Index called to open +5pts

UK 100 (UKX): 1-week chart (Source: IT-Finance)

Click graph to enlarge

Today's Main Events

  • 9:30        UK          BoE Minutes
  • 10:00     EZ           Construction Output
  • 10:30     DE/PL    Debt sales
  • 13:30     US          Housing Starts & Building Permits
  • 15:00     US          Existing Home Sales

See Live Macro Calendar for all data, incl. consensus expectations

Markets Overview: (Source: Bloomberg, FT, Reuters, DJ Newswires)

UK 100 called to open +5pts, with risk appetite in Asian markets benefiting from the Bank of Japan’s (BoJ) announcement that it too was easing monetary policy, with a more aggressive than expected additional ¥10tn (~$127bn) in asset purchases to counter the slowing Japanese economy, taking the total to ¥80tn (~$1,016bn).

With the European Central Bank (ECB) and US Federal Reserve (Fed) having already acted the way markets had hoped, and markets having begun to ease back following their anticipatory and knee-jerk rally, this overnight move may serve to rekindle bullish sentiment with expectations that others follow suit in a move akin to coordinated central bank intervention China? You ready?

US markets posted another quiet session yet closed near 2-day highs, thanks to positive macro data including a narrowing of the current account deficit and consensus beating NAHB housing market index (six-year high). This helped the greenback recover slightly against the euro, but overnight things have reversed.

While we are still waiting for Spain to ask for help, and eurozone uncertainty remaining, note that King Juan Carlos has published an open letter to Spaniards asking for unity in the face of austerity, sending the strongest signal yet that the Iberian nation’s PM Rajoy is set to request a bailout. Then again, a look at the interest rates it paid on the 12 and 18-month paper the sovereign sold yesterday (improved yields, solid demand) explain his reluctance, with Draghi’s pledge having helped already.

Overnight, macro data shows an improvement in Japanese leading indices, however, the figure we had been waiting for yesterday was the update on Chinese Foreign Direct Investment (FDI) which although still in contraction, was not half as weak as weak as expected suggesting the shunning of the slowing powerhouse, reinforcing calls for stimulus, has eased.

Today, watch out for Bank of England (BoE) Minutes for information on latest Monetary Policy Committee (MPC) meeting, which will show the balance of views on further stimulus. Most do not expect easing further easing until November, which combined with the Fed recent action could see GBP/USD push higher. The several dumps of US Housing data will be important for any signs of improved confidence in the nation, especially after the strong NAHB figure of yesterday. We also have debt sales at both ends of the Eurozone debt crisis spectrum with Germany and Portugal selling short term (6-month to 2yr) paper.

In Commodities, the yellow metal Gold is back at last week’s 6-month highs, with the USD having weakened back again versus GBP and EUR overnight. Silver doing the same. In Oil after the spike down of late, prices have stabilised around this new level likely assisted by reports (FT) that Saudi Arabia has offered its main customers in the US, Europe and Asia extra oil supply through to the end of the year, worried about the effect of rising prices on the global economy.

In the FX arena, GBP/USD trading flat back around post-QE3 highs of 1.626, and EUR/USD has reversed yesterday’s correction on a combination of expectations that Spain could be closer to asking for ECB help and US treasury bonds being shunned following a raft of more attractively yielding corporate bond issuance. After Japan’s overnight move, USD/JPY has maintained its 4-day rally, and recovered to levels last seen on 22 Aug.

For any other help you may need, be it market information or assistance with trading, make sure you speak to our trading floor.

 

Overnight Macro Data: (Source: Reuters/DJ Newswires)

  • Aussie              Westpac Leading Index           Growth
  • China               Foreign Direct Investment      Contraction, but less than expected
  • Japan               Interest Rate                           Unchanged, as expected (but more QE)
  • Japan               Leading index                          Improved
  • Japan               Coincident Index                     Improved
  • See Live Macro calendar for all details

 

UK Company Headlines: (Source: Reuters/DJ Newswires)

  • Hibu warns again on earnings
  • Terrace Hill acquires new foodstore development
  • Smiths Group full-year profit rises
  • Northgate trades in line with its expectations
  • ASOS Starts New Year with Confidence after 31% Rise in 4Q Retail Sales
  • French Connection Swings to 1H Loss, to Sell Loss Making Stores
  • Redrow FY12 Profit +70% on Higher Prices; Current Reservations +16%
  • PZ Cussons Trading to Date in Line, Financial Position Strong
  • Capital&Counties Properties to Raise Funds for Covent Garden Expansion
  • Shell New Zealand Planning to Drill 7-8 Wells in Maui Gas Field – Chairman
  • AMEC Buys 50% Stake in Brazilian Offshore Engineering Company Kromav
  • Europa Oil & Gas (Holdings) PLC Two large prospects identified on Irish Atlantic Margin

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