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IG Staff
Posts: 47
Registered: ‎08-03-2017

Morning Call 11.08.17

MACRO:

 

A bank holiday in Japan meant the widespread selling evident throughout China, Hong Kong, and Australia has yet to catch up with the likes of the Nikkei and Topix. Further comments from Trump increased the tension between the US and North Korea, in a week which has been dominated by the risk aversion evident as a result of his previous comments. This sent the VIX to a nine-month high in Asia, with the likes of gold, yen and treasuries once more gaining popularity.

Today is likely to see European and US markets continue to reflect their risk aversion to Trump’s continued heightening of tension with North Korea, amid another relatively light day on the economic calendar. Inflation data (CPI) from the US, alongside appearances from the Fed’s Kashkari and Kaplan represent the only major hurdles for traders to overcome. Also keep an eye out for the ever important US rig count data.

 

CORPORATE HIGHLIGHTS:

 

Old Mutual remains on track to complete it’s business breakup next year, in a move that is set to create listings for two of its biggest businesses. In the meanwhile, they posted a £108m profit on the disposal of Old Mutual Asset Management, delivering annualised cost savings of £31m. Adjusted operating profits rose to £969m (+37%), partly thanks to the weakness of sterling. Dividends were raised by almost a third to 3.53p per share.

Nationwide announced a fall in profits, as the firm reduces it’s buy-to-let offering, and house prices begin to slow. Pre-tax profits for Q2 was £322m, falling back from the £401m posted this time last year. Mortgages fell off the back of a reduction in luy-to-let offerings, with Nationwide lending £2.4bn in Q2, compared with £3.5bn in the second quarter of 2016.

 

ECONOMIC HIGHLIGHTS:

 

1.30pm US CPI (July): expected to rise from 0% to 0.2% MoM. Market to watch: USD crosses

 

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