Spreadex Market Update
Mixed morning for BG Group and RBS whilst Eurozone waits on latest inflation data
With little in the way of data it was another earnings-dominated day for the FTSE, yet again the UK index falling victim to a decidedly mixed morning for figures. After a string of disastrous reports from BP and Shell, the latter’s takeover target BG Group posted a better than expected set of third quarter results that included an increase output guidance going forwards and underlying earnings that were 38% higher than the analysts’ forecasts. Not that this could prevent the oil sector from clogging up the losers pile, BG itself struggling to keep its head out of the red.
Looking to the other sector that caused the FTSE so much trouble yesterday, and following the wretched report from Barclays the Royal Bank of Scotland revealed its own issues this morning. Whilst RBS was keen to highlight the £1.1 billion it made from the sale of its remaining stake in US bank Citizens, a huge drop in revenue (from £3.04 billion to £596 million year-on-year) and a £134 million operating loss combined with a warning that its further misconduct costs could be ‘substantially greater’ than first thought helped push the stock 1% lower as Friday progressed.
Over in the Eurozone things were slightly brighter, the DAX and CAC jumping by 45 and 25 points respectively, despite an unexpected fall in German retail sales and another dodgy figure coming out of Spain (this time a missed target in its third quarter GDP). Still to come is the region-wide unemployment rate and its latest inflation data; the latter is forecast to creep out of negative territory to a still unimpressive 0.0%. Something, however, that could lift the markets following Draghi’s pledge last week to do whatever it takes (i.e. more ECB QE) to ensure the Eurozone’s inflation reaches its targets.
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