Weekly Trading Update
28.08.15 Friday Morning
China
The week started with an 8.5% selloff in the Shanghai Composite Index, the PBOC responded by cutting its benchmark interest rate by 0.25% (the fifth cut since November). Yao Yudong, head of the People's Bank of China's Research Institute of Finance, reportedly blamed the Fed’s intention to raise rates in September for the market volatility, perhaps signalling the growing tension between Chinese and Western monetary policy providing further support for rumoured Yuan vs Dollar currency wars.
UK
Unsurprisingly the FTSE has risen in the latter half of the week driven by the Oil and Gas sector which is rallying on the back of a strong 10% jump in the price of oil.
On Friday UK GDP second estimate (Q2) came in line with expectations of 0.7%, this figure was largely ignored by the market on an otherwise quiet Friday.
US
Stronger than expected durable goods on Wednesday, combined with bargain hunting helped to push the Dow Jones to positive territory - a welcome relief for the bulls. This positive data momentum continued into Thursday where US Q2 GDP figure came in at 3.7% above the expected 3.2% forecast. Despite this data and yet another solid jobless claims number, FOMC members Lockhart and Dudley this week appear to have kicked the rate-hike down the road.
Eurozone
Like the rest of the Western Indices the Eurozone succumb to strong selling pressure early in the week, before pairing most of those losses in the remainder.
The FTSE, CAX, DAX, received a helping hand out of the red around lunchtime on Wednesday, after the ECB’s Peter Praet stated that ‘there should be no ambiguity on the willingness and ability of the governing council to act if needed’ when questioned about the likelihood of the Eurozone reaching its 2% inflation target.
A Greek poll on Friday showed that Alexis Tsipras’ lead over the opposition parties narrowed ahead of the 20th September snap election. The poll suggests that Alexis risks falling short of the required number of votes to gain an absolute majority position in the next Greek parliament. This may provide further instability as unless a parliament can be formed, there will be another election in November and again in December, prolonging the Greek saga.
Stock of the Week: Innovation Group PLC
Innovation Group PLC, a global software and outsourcing services provider to the insurance industry (automotive, fleet and property sectors), announced that it is in advanced talks with the Carlyle group for £500m at about 40p a share. Shares jumped from 36p to 39p (up 8.3%) on the announcement.
Open (Monday)
6113.6
Close (Thursday)
6203.7
Change
1.5%
High
6809.9
Low
5765.5
Open (Monday)
16374
Close (Thursday)
16650.5
Change
1.7%
High
16682.5
Low
15253
Open (Monday)
1159.85
Close (Thursdauy)
1124.85
Change
-3%
High
1169.35
Low
1124.85
Open (Monday)
1.5016
Close (Thursday)
1.5411
Change
-1.8
High
1.58186
Low
1.53703
Economic Diary, 31st August to 4th September 2015
Monday 31st August
All Day – GBP Bank Holiday
10.00am – EUR CPI Flash Estimate y/y
10.00am – EUR Core CPI Flash Estimate y/y
10.00am – EUR Italian Prelim CPI m/m
2.45pm – USD Chicago PMI
Tuesday 1st September
2.00am – CNY Manufacturing PMI
2.00am – CNY Non-Manufacturing PMI
2.45am – CNY Caixin Final Manufacturing PMI
2.45am – CNY Caixin Services PMI
8.15am – EUR Spanish Manufacturing PMI
8.45am – EUR Italian Manufacturing PMI
8.50am – EUR French Final Manufacturing PMI
8.55am – EUR German Final Manufacturing PMI
8.55am – EUR German Unemployment Change
9.00am – EUR Final Manufacturing PMI
9.30am – GBP Manufacturing PMI
9.30am – GBP Net Lending to Individuals m/m
10.00am – EUR Unemployment Rate
2.45pm – USD Final Manufacturing PMI
3.00pm – USD ISM Manufacturing PMI
Wednesday 2nd September
8.00am – EUR Spanish Unemployment Change
9.30am – GBP Construction PMI
1.15pm – USD ADP Non-Farm Employment Change
1.30pm – USD Revised Non-Farm Productivity q/q
3.00pm – USD Factory Orders m/m
3.30pm – USD Crude Oil Inventories
Thursday 3rd September
8.15am – EUR Spanish Services PMI
8.45am – EUR Italian Services PMI
8.50am – EUR French Final Services PMI
8.55am – EUR German Final Services PMI
9.00am – EUR Final Services PMI
9.30am – GBP Services PMI
10.00am – EUR Retail Sales m/m
1.30pm – EUR ECB Press Conference
1.30pm – USD Trade Balance
1.30pm – USD Unemployment Claims
2.45pm – USD Final Services PMI
3.00pm – USD ISM Non-Manufacturing PMI
Friday 4th September
All Day – G20 Meetings
7.00am – EUR German Factory Orders m/m
9.10am – EUR Retail PMI
9.30am – GBP Consumer Inflation Expectations
10.00am – EUR Revised GDP q/q
1.10pm – USD FOMC Member Lacker Speaks
1.30pm – USD Non-Farm Employment Change
1.30pm – USD Unemployment Rate
1.30pm – USD Average Hourly Earnings m/m
Earnings releases, 31st August to 4th September 2015
Monday 31st August
N/A
Tuesday 1st September
N/A
Wednesday 2nd September
Ashtead Group PLC – Q1 2016 Earnings Release
Thursday 3rd September
Campbell Soup Co – Q4 2015 Earnings Release
Friday 4th September
Tasty PLC – Interim Results
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