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Market volatility remains - EMEA brief 12th July



Asian overnight: Market volatility remains evident throughout Asia, with yesterday’s sharp tumble being followed up by a strong rebound overnight. Chief amongst those gainers were the Chinese markets, which gained ground despite the ongoing trade war with the US. Suggestions that China and the US could resume trade talks has helped boost short term market sentiment. Crude prices were also fighting back in the wake of the biggest one-day decline in more than two years yesterday.

UK, US and Europe: Looking ahead, a relatively quiet European session sees industrial production data from the eurozone take precedence in the lead up to the latest ECB monetary policy minutes. Meanwhile, the US will be keeping a close eye out for the CPI inflation data and unemployment claims number.

South Africa: We are expecting a higher open on the local SA bourse today as US Futures and Asian markets rebound this morning. Emerging market currencies and metal prices are in turn finding some reprieve today. Tencent Holdings is up 0.5% in Asia suggestive of a positive start for major holding company Naspers. BHP Billiton is trading 0.6% lower in Australia suggestive of a slightly softer start for locally listed diversified miners. Mining production and sales data is scheduled for release at 11:30am and Manufacturing production and sales data is scheduled for release at 1pm today. 

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


10am – eurozone industrial production (May): expected to be 2.8% YoY and 0.8% MoM, from 1.7% and -0.9% respectively. Market to watch: EUR crosses

1.30pm – US CPI (June), initial jobless claims (w/e 7 July) headline CPI to be 2.9% YoY and 0.2% MoM, from 2.8% and 0.2% respectively. Core CPI to be 0.2% MoM and 2.3% YoY, from 0.2% and 2.2% respectively. Initial jobless claims to fall to 227,000 for the week, from 231,000 a week earlier. Markets to watch: US indices, USD crosses

Source: Daily FX Economic Calendar

Corporate News, Upgrades and Downgrades

  • Dunelm said that store like-for-like sales were up 1% to £805 million for the year to 30 July, while online sales rose 37.9% like-for-like to £105.4 million. Pre-tax profit is expected to be £102 million for the full year. 
  • ASOS expects full-year profit to be in line with forecasts, as total sales rose 22% to £802.7 million for the four months to 30 June. Full-year pre-tax profit is expected to be around £101 million. 
  • B&M European Value Retail said that it enjoyed a strong start to the year, with revenue growth of 21.3% overall in the quarter, up 1.6% on a like-for-like basis. 

Aker BP upgraded to overweight at JPMorgan
Hapag-Lloyd raised to neutral at Goldman
Maersk upgraded to buy at Goldman
Roche upgraded to buy at Berenberg

ITV downgraded to neutral at Goldman
Pagegroup downgraded to hold at Kepler Cheuvreux
Sky cut to neutral at Macquarie
Veidekke downgraded to hold at SEB Equities

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