Asian overnight: A wildly varied session overnight saw losses for the likes of the Nikkei 225 and ASX 200 counterbalanced by strong gains in the Shenzhen composite (2%) and Hang Seng (1.3%). The euro gained sharply overnight, as an agreement at the EU summit over immigration was seem to appease hard line anti-immigration leaders, and crucially ease the pressure on Angela Merkel. On the data front, a raft of Japanese economic figures saw improved inflation, unemployment, industrial production, and housing starts.
UK, US and Europe: Looking ahead, the economic calendar looks to set up a busy day, with the release of the final UK GDP reading, alongside the flash eurozone CPI reading for June. With yesterday’s GDP reading from the US was revised lower from 2.2% to 2.0%, there is going to be of particular interest for this UK figure. Meanwhile, with the ECB heavily reliant upon the trajectory of inflation, traders should be watching out for the CPI figure as a driver of euro volatility. In the US session, watch out for the release of US personal income and spending, which will be hugely important given the influence of domestic consumption as a driver of US growth.
Economic calendar - key events and forecast (times in BST)
Source: Daily FX Economic Calendar
Corporate News, Upgrades and Downgrades
Serco said that it expects underlying trading profit for the first half to rise by 20%, but that revenue for the period would be around £1.35 billion, down from £1.51 billion a year earlier.
BAE Systems has won a $35 billion contract to provide nine new frigates for the Royal Australian Navy. Production is expected to begin in the early 2020s.
Allianz raised to overweight at JPMorgan
BAE upgraded to neutral at JPMorgan
Swatch upgraded to buy at Citi
Ageas downgraded to hold at SocGen
Amer Sports downgraded to reduce at Inderes
Bpost cut to equal-weight at Morgan Stanley
Hunting cut to underweight at Morgan Stanley
Please note: This information has been prpared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.