Asian overnight: Another bearish session overnight saw Chinese and Hong Kong indices lead the decline, with the first round of tariffs on Chinese goods set to take effect on Friday. The recent decline in the yuan was arrested, with strong dollar selling pressure from Chinese banks looking like intervention from the Chinese authorities. Australian data came in mixed, with a strong retail sales reading counteracted by a lower than expected trade balance figure. Meanwhile, the Chinese Caixin services PMI rose sharply, driving the measure to rise from 52.9 to 53.9.

UK, US and Europe: The services PMI theme looks set to continue, with European nations releasing their own version throughout the morning. The big focus will be upon the UK services PMI figure, with the release playing a key part in dictating GDP estimates for Q2. Meanwhile, the US markets are closed as the country celebrates Independence Day.

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

9.30am – UK services PMI (June): expected to fall to 53 from 54. Markets to watch: FTSE 100/250, GBP crosses

Source: Daily FX Economic Calendar

Corporate News, Upgrades and Downgrades

• Sainsbury’s said that sales rose 0.8% in Q1, and were up 0.2% on a like-for-like basis. Price cuts had helped to boost performance. 

• SIG reported a 0.6% rise in first-half revenue, with currency improvements offsetting bad weather. Revenue was flat on a like-for-like basis. 

• National Express has secured a €1 billion contract to operate buses in Morocco, with 500 buses carrying 109 million passengers a year across 61 routes.  

• Topps Tiles suffered a 2.3% drop in like-for-like sales in the 13 weeks to 1 July.

BN FP upgraded to outperform at RBC
GFT upgraded to hold at Kepler Cheuvreux
Petra Diamonds upgraded to outperform at RBC

Brunello Cucinelli downgraded to hold at Berenberg

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.