- Turkeys government has said it would provide liquidity and cut reserve requirements to Turkish banks yesterday. Lira drops.
- MSCI world equity index which tracks shares in 47 countries across the globe, down 1.1% yesterday and subdued overnight.
- Nikkei bounces 2.3% overnight.
- Deutsche Bank pointed to 5 lenders most at risk in the country due to a ‘meaningful presence’ - BBVA, UCG, ING, BNPP, and HSBC - the latter of which was down 0.72% on the closing bell yesterday.
- In tech Netflix head of finance will leave after 14 years, whilst Musk looks to Saudi for Tesla privatisation funding.
- German pharma goliath Bayer fell as much as 10% after a $289m fine from the courts who ruled one of its weed killers contains carcinogenic chemicals. The firm faces 5,000 other possible suits.
- Gold loses safe-haven status, near 13-month low and breaks the $1200 support.
Asian overnight: Global markets trade in a more subdued fashion after yesterday's Turkey induced panic. US Index Futures are trading modestly firmer while Asian markets trade mixed this morning. The dollar is trading modestly lower today against a broad basket of currencies, in turn we are seeing a slight lift in emerging market currencies. While off their respective lows, precious metal prices are trading at severely depressed levels.
Japanese and Australian markets regained some sense of composure following the recent Turkey-led declines. Interestingly, the Chinese and Hong Kong markets remained entrenched in a downward spiral, with a whole host of disappointing economic numbers from China denting confidence. Weaker than expected fixed asset investment, industrial production, and retail sales figures were accompanied by a sharp jump in unemployment. However, while China seems to be feeling the effects of their breakdown in trade with the US, the surprise rise in German GDP (0.5% from 0.3%) helped allay fears closer to home.
UK, US and Europe: Looking ahead, Europe looks like the place to be, with a whole host of economic announcements ahead of a remarkably quiet economic calendar from the US. Early trade brings the pound into focus, with the latest jobs data bringing a particular focus on the average earnings numbers. We then shift our concerns across the channel, with the flash eurozone GDP reading due out alongside the latest German ZEW sentiment figures. With trade concerns denting this German centric survey, it is also worth watching the eurozone industrial production figure due out at the same time.
South Africa: BHP Billiton is trading 1.5% higher in Australia, suggestive of a partial rebound in local diversified resource counters. Tencent Holdings is down 4.54% in Asia sugestive of a weak start for major holding company Naspers, which accounts for a 23% weighting in the Jse Top 40 Index.
Economic calendar - key events and forecast (times in BST)
9.30am – UK employment data: July claimant count to fall by 7800, while the May unemployment rate is expected to rise to 4.3% from 4.2%, and average earnings for June (inc bonus) are forecast to be 2.7% higher. Market to watch: GBP crosses
10am – eurozone GDP (Q2, 2nd estimate): growth expected to be 0.3% QoQ and 2.1% YoY. Market to watch: EUR crosses
10am – German ZEW (August): economic sentiment index expected to fall to -17.7. Market to watch: EUR crosses
Source: Daily FX Economic Calendar
Corporate News, Upgrades and Downgrades
- Royal Mail has said that it will appeal the £50 million fine imposed by Ofcom, which the regulator imposed for anti-competitive practices.
- Antofagasta reported a 32% drop in pre-tax profit for the first-half, to$465.6 million, while revenue was down 3.6% to $2.12 billion. Higher costs and lower production hit performance, and the firm slashed the dividend to 6.8p, down 34%. The firm added that trade tensions were creating ‘considerable market uncertainty’.
- esure has reached a deal with Bain Capital, and will go private for £1.2 billion. This is a premium of 37% to Friday’s closing price. Bad weather pushed first-half profits down to £36.1 million, 20% lower, but gross written premiums rose 12% to £440.3 million.
Atlas Copco upgraded to buy at DNB Markets
TLG Immobilien raised to buy at Kepler Cheuvreux
Elementis upgraded to buy at Berenberg
Spectris upgraded to add at Peel Hunt
BBVA downgraded to hold at DZ Bank
Siltronic downgraded to neutral at Citi
Bayer downgraded to neutral at Citi
Card Factory downgraded to sell at Berenberg
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