UK, US and Europe: Looking ahead, an appearance from Bundesbank President Weidmann provides the one point of interest in an otherwise quiet eurozone session. In the UK, Brexit is back on the agenda, with a series of amendments being voted on which could shape the process for leaving the EU. However, with Theresa May already setting out a new sequence of events to allow for a potential extension, these are largely a formality. Also keep an eye out for Canadian CPI, alongside US trade balance, factory orders and crude inventories. Finally, with Jerome Powell returning for a second day of testimony in Washington, watch out for potential dollar volatility.
South Africa: Global markets are trading mixed with US index futures modestly lower, while Asian equity markets trade marginally firmer on the day. In turn, our local bourse is expected to open flat to slightly higher this morning. Precious metal prices remain firm (platinum in particular) trading near short term highs, while base metals trade mixed with copper up and iron ore down on the day. The rand has managed to firm against the majors. There is little in the way of high impact data scheduled for release today, although markets will look to the continued testimony of Fed Chairman, Jerome Powell this afternoon for directional guidance. Tencent is down 0.5% in Asia, suggestive of a softer start for major holding company Naspers. The BHP Group is up 0.4% in Australia, suggestive of a positive start for local diversified resource counters.
Economic calendar - key events and forecast (times in GMT)
Source: Daily FX Economic Calendar
10am – eurozone business confidence (February): forecast to rise to 0.75 from 0.69. Market to watch: EUR crosses
1.30pm – Canada CPI (January): prices expected to rise 1.7% YoY. Market to watch: CAD crosses
3pm – US pending home sales (January): sales expected to fall 1.9% MoM and 11% YoY. Markets to watch: US indices, USD crosses
3.30pm – US EIA crude inventories (w/e 22 February): stockpiles rose by 3.7 million barrels last week. Markets to watch: Brent, WTI
Corporate News, Upgrades and Downgrades
Marks & Spencer will launch a rights issue and cut its dividend in order to pay for a joint venture with Ocado. M&S will pay Ocado £750 million for its half of the venture, with a £600 million rights issue and a 40% cut to the dividend. Rio Tinto said that net earnings rose 56% to $13.64 billion for 2018, while underlying earnings rose 2% to $8.81 billion. ITV said that 2018 pre-tax profit was up 13% to £567 million, while revenue was up 3% to £3.77 billion. Advertising revenue was weak, but growth in online activities offset this. Taylor Wimpey reported an 18% rise in pre-tax profit, to £810.7 million, for 2018 while the number of completions rose and margins grew. The firm said it had a made a positive start to 2019. Freenet upgraded to hold at Berenberg
Total upgraded to outperform at RBC
Viscofan upgraded to hold at Santander
Air France-KLM cut to equal-weight at Morgan Stanley
Metro Bank downgraded to market perform at KBW
Tullow downgraded to hold at Jefferies
Shell downgraded to sector perform at RB
IGTV featured video
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.
- Read more...
- 0 comments
- 1,389 views