Jump to content

Brexit breakdown? - EMEA brief 10th July

Sign in to follow this  
JamesIG

  • A lack of trade war news is jumped on by Asian equity markets which rally for a third consecutive session.
  • Boris Johnson follows David Davis and resigns from his position of Foreign Secretary sparking speculation of a rebellion.
  • Oil dropped yesterday after Merkel and Li commit to Iran nuclear deal, before supply shortages and strikes in of oil workers in Norway aided the reversal for brent and WTI to finish up.
  • Gold prices inch up amid the continued Brexit uncertainty, whilst subdued dollar assists commodities. 

Asian overnight: Asian markets failed to sustain their overwhelmingly positive start to the week, with the overnight session seeing gains in Japanese and Hong Kong markets counteracted by weakness in China and Australia. Energy stocks were in focus amid a rise in crude prices, while the pound recovered much of the losses seen in the wake of yesterday’s political rollercoaster ride. On the data front, Chinese inflation data moved higher as expected, with CPI rising from 1.8% to 1.9%, while PPI jumped from 4.1% to 4.7%.

UK, US and Europe: Despite two years of hashing out a brexit plan and continued discussions with the EU, and a confirmation by May that she had secured an agreement on Britains biggest foreign and trading policy in nearly 50 years, two UK MP's quit citing a change of heart in something the cabinet had agreed on last week.  Looking ahead, the UK remains in focus, with the first monthly GDP reading from the ONS set to be released. This comes amid the release of goods trade balance data, industrial, and manufacturing production figures, ensuring the pound remains in focus. Finally, watch out for the ZEW economic survey from Germany, with eurozone sentiment in the spotlight.

South Africa: Global markets are trading mixed this morning as US Futures continue overnight gains in US equity markets, while the Shanghai Composite and Australia All Ordinaries Indices trade lower today. While the trade war narrative remains in markets investor focus will now find a further catalyst in the US earnings season which commences this week. Precious metal prices are trading relatively unchanged this morning, although base metal prices looked to have commenced with a rebound. The rand has firmed, particularly against a weakening pound following yesterday's resignation of UK ministers. Tencent Holdings is trading 2.3% lower in Asia, suggestive of a similar start today for major holding company Naspers. BHP Billiton is trading 1.09% higher this morning in Australia, suggestive of a positive start for local diversified miners. 

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

1947609437_2018-07-1007_56_26-ForexEconomicCalendar.thumb.png.7167404eac3b4e3990188be224311c0c.png

9.30am – UK trade balance (May): deficit forecast to narrow to £1.2 billion from £5.3 billion. Market to watch: GBP crosses

10am – German ZEW economic sentiment (July): forecast to rise to -14 from -16.1. Market to watch: EUR crosses

Source: Daily FX Economic Calendar

Corporate News, Upgrades and Downgrades

  • Ocado has seen a first half loss of £9 million, compared to a £7.7 million profit a year ago. Revenue was up 12.1% to £800 million. 

  • Kier said that it expected underlying profit to be in line with forecasts, and while poor weather has hit activity, volumes have returned to levels in line with expectations. 

  • TP ICAP has downgraded earnings forecasts for the year, due to rising costs and lower-than-forecast benefits from the recent merger. Finance costs will rise, as will staff compensation. 

  • Tsogo Sun Holdings - Further to the cautionary announcements issued by Tsogo, the last of which was issued on  SENS on 31 May 2018, the board of directors of Tsogo  is pleased to announce that Akani Egoli Proprietary Limited, Silverstar Casino Proprietary Limited, Tsogo Sun Casinos Proprietary Limited, Tsogo Sun KwaZulu Natal Proprietary Limited and Tsogo Sun Newcastle Proprietary Limited, all  of which are wholly-owned subsidiaries of Tsogo and Tsogo, Listed Investments Proprietary Limited and Cassava Investments Proprietary Limited, have entered into a sale of shares and subscription agreement with Hospitality Property Fund Limited and its wholly-owned  subsidiary Merway Fifth Investments Proprietary Limited for the disposal by the  sellers to Hospitality of a portfolio of seven mixed-use casino precinct properties  for an aggregate purchase consideration of R23 billion.

Acacia Mining upgraded to overweight at Barclays
Ascential upgraded to add at Peel Hunt
Chemring Group raised to overweight at Barclays

UBS upgrade Barclays Africa from sell to neutral with a target price of 19700c

Computacenter cut to underweight at Barclays
Straumann cut to market perform at Bernstein
Temenos cut to underweight at Barclays

Featured Video from IGTV

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.

Sign in to follow this  


0 Comments

Recommended Comments

There are no comments to display.

Your content will need to be approved by a moderator

Guest
You are commenting as a guest. If you have an account, please sign in.
Add a comment...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

  • Blog Statistics

    • Total Blogs
      3
    • Total Entries
      281
  • Our picks

    • China to cut US car tariffs from 40% to 15%- EMEA Brief 12 Dec
      Asia stocks were higher Wednesday morning; Nikkei 225 rising over 2%, ASX 200 up by 1.25% and Hang Seng Index around 1.36%. This was followed by the news of China to cut US car tariffs from the planned 40% to 15%, the same tax charge on car imports from other countries
      • 0 replies
    • The pattern continues - APAC brief 12 Dec
      The pattern continues: Wall Street indices have been swinging about madly again. The pattern continues: an open, a rally or fall, then a retracement or recovery. Today we’ve had an open, a rally, then retracement, then a recovery again. There were stories behind this price-action. Everything that happened overnight appeared perfectly explicable. One wonders though if the swings in trading activity are being overly attributed to headlines. Or perhaps it’s the case that higher volatility and sensitive nerves are leading to accentuated moves. Whatever the cause, fundamentally, the bears still have control of the equity market. There is a softer intensity to the selling on Wall Street this week. However, with the extremeness of last week’s moves having not been unwound yet, what we are seeing is sellers piling in on top of sellers, bit by bit.

      ASX200: SPI futures have turned positive, after oscillating wildly during the overnight session. That contract is indicating a 17-point jump for the ASX200 at time of writing. Yesterday was a tepid but respectable day for Australian shares, managing to muster a 0.4 per cent gain for the day. Volume was slightly above the 100-day average and breadth was okay. Growth stocks led the charge, following US tech’s gains the night prior, with the health care sector up 1.7 per cent, courtesy of a strong bid for CSL and ResMed. The materials space was the biggest points score for the index, adding 8 to the overall index’s performance. The trend is still down for the ASX200, as it is with global equity indices presently. However, yesterday’s daily candle, combined with a bullish divergence on the RSI, suggests some buyers are re-entering the market in the short-term, potentially offering temporary upside to ~5700.
      • 0 replies
    • Trading in Asia was mixed as US shares stabilized overnight. In the meanwhile, the ongoing discussions between China and the US adds uncertainty.
      • 0 replies
  • Latest Forum Topics

×