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Emerging market concerns continue - EMEA brief 06 Sep



  • The Asian market index futures boards are seeing a sea of red on the back of continued EM anxieties.
  • Dollar seeing pressure as European peers are bid up.
  • Tesla stock slips as investor worries deepen, whilst the Tesla bond hits a record low.
  • Uber on track for an IPO in 2019, however there are no plans to sell it's tech unit according to CEO.
  • Goldman have dropped bitcoin trading plans for now according to reports. Crypto space crashes. 
  • Gold seeing an increase in physical demand, whilst also helped by dollar weakness.

Asian overnight: Emerging market concerns continued to weigh on markets overnight, while the bruising handed out to US tech stocks also bore down on bullish sentiment. Tokyo, Hong Kong and Australia all fell, but there was one bright spot as the CSI 300 rose 0.4%. Keep an eye on UK utilities as Ofgem proposes an energy price cap that is the biggest intervention in the UK energy market since privatisation in the 1980s.

UK, US and Europe: US ADP numbers (delayed by a day due to the Labor Day holiday) and the ISM non-manufacturing number will be the main events today, ahead of non-farm payrolls tomorrow. Emerging market jitters will be watched closely, as will the ongoing strength in the US dollar.

Economic calendar - key events and forecast (times in BST)

2018-09-06 07_51_39-Forex Economic Calendar.png

Source: Daily FX Economic Calendar

1.15pm – US ADP report (August): 187K jobs expected to have been created, from 219K a month earlier. Markets to watch: US indices, USD crosses
3pm – US ISM non-mfg PMI (August): forecast to rise to 56 from 55.7. Markets to watch: US indices, USD crosses
4pm – US EIA crude inventories: forecast to rise to -0.88M from -2.6M. Markets to watch: WTI and Brent

Corporate News, Upgrades and Downgrades

  • Dixons Carphone reported flat like-for-like revenues in Q1, hit by difficulties in mobile phones, although consumer electronics were boosted by World Cup demand. Full-year pre-tax profit guidance was maintained at £300 million.  
  • McCarthy & Stone has reduced its full-year operating profit forecast, due to weaker consumer spending and economic uncertainty. The firm now expects full year operating profit of £65-73 million, from the previous estimate of £65-80 million. 
  • Melrose said that it suffered an operating loss of £256 million for the first half, down from a profit of £58 million. Trading for the second half so far remains in line with expectations. 

BNP Paribas Upgraded to Hold at Berenberg
KAZ Minerals Upgraded to Equal-weight at Morgan Stanley
Enel Upgraded to Buy at Goldman

Scor Downgraded to Hold at SocGen
Bodycote Downgraded to Hold at Liberum
IMI Downgraded to Sell at Liberum

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