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Oil slips 3% - EMEA brief 9 August

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JamesIG

  • Asia share markets mixed, China up on stimulus hopes
  • GBPUSD hits a one year low as Brexit fears continue.
  • Sterling’s slump guided the FTSE on a stellar rally.
  • USD/TRY poised for continued big volatility swings over US/Turkey meeting.
  • Oil price steady after sliding 3% yesterday.

Asian overnight: Asian stocks were largely higher, with Japanese indices providing the one outlier amid a wider rally led by rampant upside for Chinese and Hong Kong stocks. One major drag has been energy stocks, coming off the back of a 3% fall in crude prices yesterday. The New Zealand dollar fell sharply, after the RBNZ governor set out a timetable which saw rate remain at rock-bottom levels into 2020. Elsewhere, Chinese CPI and PPI came in higher than expected, with CPI in particular rising from 1.9% to 2.1%.

UK, US and Europe: Looking ahead, the data remains relatively thin on the ground, with US PPIP and unemployment claims providing the only highlights. Earnings-wise, keep an eye out for figures from the likes of Macy's, Viacom, and News Corp.

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

2018-08-09 08_00_26-Forex Economic Calendar.png

1.30pm – US PPI (July): Forecast to fall from 3.4% to 3.2%. Markets to watch: USD crosses, US indices

Source: Daily FX Economic Calendar

Corporate News, Upgrades and Downgrades

  • Legal & General saw a fall in pre-tax profits (-19%) for the first half of the year, with market volatility impacted upon investment performance. This led to an 81% fall in investment (and other variances), from £175m to £33m. £90m of that H1 loss came from the firm’s capital traded assets portfolio. As a result, earnings per share fell 8% to 13p from 14.19p, with interim dividends for the group rising 7% to 4.60p per share (from 4.30p).
  • Cineworld Group saw H1 profit almost trebled after a successful takeover of US group Regal Entertainment helped build on the success back at home in the UK and Ireland. The firm saw pro-forma revenues rise 2.5% in the UK and Ireland despite the heatwave and World Cup, while the US (which now accounts for 70% of Group sales) rose by 14.3%.
  • Randgold Resources saw Q2 pre-tax profits halve from $150.16 million to $74.34 million, while earnings per share fell to $0.55, from $0.89 last year. Total revenues also suffered, falling to $283.66 million, from $336.79 million last year. Finally, sales of gold also decreased for the quarter, falling to $411.51 million from $422.14 million last year. 

BBA Aviation upgraded to buy at Liberum
Capita upgraded to buy at Jefferies; PT 1.80 Pounds
Deutsche Post upgraded to buy at HSBC
UDG upgraded to buy at Jefferies

Ahold Delhaize cut to hold at Kepler Cheuvreux
Grammer downgraded to hold at Quirin Privatbank AG
L’Oreal downgraded to sell at Berenberg
Tecan downgraded to hold at Kepler Cheuvreux

Please note: This information has been prepared 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.

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