- FTSE 100 closes 33 points lower
- HSBC, BP, Weir higher after earnings, Fresnillo falls
- Global manufacturing PMIs confirm sector weakness
4.40pm: FTSE closes near day's low
After a topsy-turvey day, the FTSE 100 finished 33 points lower to close at 7,666, equal to a 0.4% loss on the day.
Any hope of further upside were dashed by the shocking weakness in German manufacturing data, IG's Chris Beauchamp noted.
"One datapoint is not enough to move the ECB towards a furtherance of their dovish posture, so stocks are on their own for now," Beauchamp wrote.
“Hopes of a sustained rally in the FTSE 100 have been dashed too, though at least BP hasn’t been the drag on performance in the manner of Shell last week. But if the weakness in German data begins to spread then we could see August live up to its reputation as an unpropitious month for stocks, even if equities do continue to gain into the end of the year.”
3.57pm: AG Barr calls time after more than 20 years at the helm
Roger White is stepping down as chief executive of AG Barr after more than two decades with the maker of soft drinks.
White said it was the “right time” to think about his succession and intends to depart within the next 12 months.
He became the first non-family member to run the business when he took over from Robin Barr in 2004.
AG Barr has been listed in London since 1965 and is best known for making Irn-Bru but its portfolio also includes Tizer, Rubicon, Funkin cocktails, the energy drink Boost and Moma oat milk.
3.45pm: US jobs market resilient but manufacturing stuck in the doldrums
A mixed bag of data in the US.
Ahead of non-farm payrolls figures on Friday, the US Bureau of Labor Statistics reported the number of job openings on the last business day of June stood at 9.58mln slightly below Street expectations of 9.62mln but nonetheless showing the jobs market remains resilient.
The figure in the Job Openings and Labor Turnover Survey (JOLTS) compared to 9.82mln in May.
Elsewhere, two manufacturing surveys confirmed the sector remained under pressure although there were signs of easing pressures.
The ISM manufacturing PMI climbed to 46.4 in July, from 46.0 in June, but remained firmly in contraction, with the reading below a FXStreet cited consensus of 46.8.
Meanwhile the latest S&P Global PMI rose to 49.0 points in July, rising from 46.3 in June, but still below the 50 mark which splits contraction from expansion.
3.14pm: Bank of England appoints Sarah Breeden as Deputy Governor
Sarah Breeden, currently the Bank of England's executive director of financial stability strategy and risk, will become deputy governor for financial stability on 1 November, succeeding Sir Jon Cunliffe.
Announcing the appointment, chancellor Jeremy Hunt said: "I am pleased to appoint Sarah Breeden as the next Deputy Governor of the Bank of England who brings extensive experience to the role including from her work as a member of the FPC and across monetary, economic and financial matters."
Governor of the Bank of England, Andrew Bailey, said: "I am delighted that Sarah has been appointed as Deputy Governor for Financial Stability. She will bring a wealth of financial and economic policy knowledge to the role, both domestically and internationally.'
Breeden has worked at the Bank since 1991, shortly after leaving Cambridge University. In the financial crisis she was responsible for the design of the Bank’s liquidity assistance to Northern Rock and led the Bank’s work on Northern Rock’s resolution.
Breeden said she was "thrilled" to have been appointed.
2.55pm: New 888 boss bets big on improving fortunes
The incoming boss of 888 Holdings PLC (LSE:888) has shown confidence in the betting firm paying over £1mln for a chunk of shares.
Widerström, who will take the helm in October of the owner of William Hill and Mr Green, has bought 940,996 shares at a price of 109.6p each, £1.03mln.
Shares rose 2.1% to 110.30p.
Widerstrom has more than 17 years of experience in the online gaming industry, having most recently held the position of CEO at Fortuna Entertainment Group.
888 itself has had a troubled year including a record fine for William Hill from the gambling watchdog and a probe into its Middle East operations after failing to protect consumers and for weak anti-money laundering controls.
2.42pm: Wall Street mixed as earnings keep rolling in
Across the pond and the stocks have made a mixed start to proceedings as investors digest another slew of corporate earnings.
Just after the market opened, the Dow Jones had added 85 points or 0.2%, while the S&P 500 was down 9 points or 0.2% and the Nasdaq had shed 83 points or 0.6% at 14,263 points.
Major movers included Caterpillar, up 4.6% on an earnings beat, and Merck, up 1.4% after reporting a narrower-than-expected loss while raising its sales outlook.
Uber fell 5.1% despite reporting its first-ever operating profit in the second quarter, and Pfizer slipped 0.7% as the pharmaceutical firm slashed its full-year sales guidance by $1 billion.
Back in London, and the FTSE 100 is down 15 points at 7,684 while the FTSE 250 is 59 points lower at 19,084.
2.08pm: M&S recovery not a false dawn - Barclays
Marks and Spencer Group PLC (LSE:MKS) has laid the foundations for significant top-line growth and margin expansion, according to analysts at Barclays.
Although M&S has emerged from the pandemic period with strong market share momentum, and significantly reduced debt, Barclays says conversations with many investors suggest widespread scepticism as to whether this is a real change or just another ‘false dawn’.
It accepts this is not an unreasonable worry given that the the story of M&S over the last 25 years has been characterised by revivals that soon peter out.
But it believes M&S has effected a huge amount of fundamental change over recent years.
"Almost every critical aspect of the company - from its real-estate strategy to its online business and its logistics - is in the process of being thoroughly updated and made fit for the future," Barclays said.
"We still see significant potential upside and increase our price target to 260p (from 220p), implying upside of 26%," the broker added.
Shares in M&S held firm against the weaker market, up 1%, at 208.36p
1.30pm: Here’s a recap of the top risers and fallers on market today
Shares in the wellness group Cellular Goods PLC (LSE:CBX) rose 7% in early trade following the announcement that it will begin offering products from its 'Look Better' skincare range in France and Germany, starting this autumn.
The expansion is aimed at tapping into the significant market potential in these two countries, which are among the largest cannabinoid markets in the EU.
Shares in Man Group PLC (LSE:EMG) fell nearly 7% on Tuesday morning as the investment management firm reported a fall in half-year profits and revenue due to a slump in performance fees.
Shares in Fresnillo PLC (LSE:FRES), the world's largest silver miner, tumbled nearly 4% following a significant drop in interim profits for 2023.
The decline was primarily driven by cost inflation and the sharp appreciation of the Mexican peso.
United Oil & Gas dropped 10% as it cautioned that conditions for its sale of the Maria licence in the North Sea to Quattro Energy had not been met.
The longstop date for the deal was the end of July and discussions, described as advanced, are underway about a further possible extension.
1.17pm: 4imprint makes its mark, shares soar
Top of the FTSE 250 risers is 4imprint which has surged 12.4% taking top from Domino's Pizza.
In a trading update, the firm said that demand continued to be robust and that it was set to beat analysts' estimates for half-year profits.
The marketer of promotional merchandise said that demand in the first half of 2023 continued to be "encouraging" with year-to-date total order intake 18% ahead on the year before.
4imprint also said that it was anticipating a "strong" first half for revenues, profits and cash.
It guided towards full-year revenues slightly above US$1.3bn, adding that profit before tax would "materially" exceed analysts' estimates at no less than US$125mln.
12.58pm: Wall Street called lower, pausing after recent gains
The Dow Jones index is expected to open slightly lower, testing recent gains alongside the Nasdaq and the S&P 500, as investors focus on economic data at the start of the month.
In pre-market trading, futures for the Dow Jones Industrial Average (DJIA) were 0.1% lower, while those for the S&P 500 fell 0.3%, and contracts for the Nasdaq 100 futures were down 0.4%.
The Dow closed Monday up 100 points, 0.3%, at 35,559, the Nasdaq Composite added 29 points, 0.2%, to 14,346 and the S&P 500 improved 7 points, 0.2%, to 4,589. The small-cap Russell 2000 index gained 19 points, 1%, to 2,001.
“Stateside, the first reading for the July PMI manufacturing index improved to a three-month high, although it still remains below the 50 expansion level. There are signs that government incentives for 'green' industries are helping to boost demand for capital goods, offering hope that the sector's activity may be bottoming out,” noted Patrick Munnelly at Tick Mill Group.
“Nevertheless, the ISM manufacturing index for July is still expected to be below the expansion level of 50,” he added.
The S&P manufacturing sector PMI is due out at 9.45am ET. Also out today are data on US construction spending for June which are likely to have been affected by the Fed Reserve’s spate of interest rate hikes.
Last week, the Federal hiked rates to their highest level in over 22 years.
The crucial piece of economic data this week comes out on Friday when July payrolls report is due Forecasts predict that the US economy to add 200,000 jobs for the month. Non-farm payrolls increased by 209,000 in June.
On the earnings front, some key results are expected with Uber, Pfizer Merck all reporting updates.
12.29am: FTSE 100 rallies after mid-morning wobble
Blue-chips have rallied after a mid-morng blip and are now down 13 points at 7,687 after hitting an intra-day low of 7,650 earlier.
Weak manufacturing data in the UK and Europe pulled the lead index but some brighter earnings in the US have lifted the mood.
Industrial bellwether Caterpillar beat earnings expectations in the second quarter while Merck has raised its full year revenue forecasts.
Back in London and Weir group continues to lead the way, up 3.5% with BP 2.0% higher.
BT has recovered most of the ground lost yesterday following the appointment of Allison Kirkby as its new chief executive with shares up 1.4%.
11.58am: UBS thinks a weaker earnings trend is underway
We’re well into the second quarter earnings season now so what has it showed so far?
Analysts at UBS have taken a look and think a weaker earnings picture may be unfolding.
“Net positive surprises have remained subdued for both revenue and earnings, aligning with our view that a weaker earnings trend may be underway,” the Swiss bank said.
UBS said earnings estimates for the UK large-cap index for 2023 have been revised lower by around 2–3% in the past month, partly due to dollar weakness.
The bank pointed out the FTSE 100 only generates approximately a quarter of its revenues in sterling, and around 45% in USD or dollar-linked currencies.
So, a weaker dollar or stronger sterling can have a significant negative effect on companies in the benchmark.
UBS stated the consensus is now forecasting a decline of around 9% in FTSE 100 earnings this year, and a rebound of 4% in 2025, broadly in line with its expectations but already been priced into the FTSE 100’s 12-month forward P/E valuation of 10.7x.
“Whilst sectors like banks, media and semis are among the largest contributors to net positive revenue and earnings beats so far this season, both on a company count and market cap basis, energy has seen more negative beats than positive,” UBS added.
Regardless of the sector, the payoff seems to be in margins, UBS thinks.
“The market has been reacting more to margin surprises with companies seeing an average +1.2% relative performance on results day if they beat margin expectations and an average -1.3% if they miss,” UBS estimated.
“This compares to the +0.6% reward for beating earnings or sales and -0.7% penalty for missing,” it noted.
11.41am: Manufacturing slump shows no signs of slowing
The picture remains bleak for the UK manufacturing sector, economists said after figures showed a further decline in activity.
The seasonally adjusted S&P Global/CIPS UK manufacturing PMI fell to 45.3 in July, down from 46.5 in June, its lowest reading in the year-so-far and joint-weakest since May 2020.
“The downturn in the manufacturing sector is showing no signs of abating, as higher interest rates curb demand for goods both at home and abroad” said Gabriella Dickens at Pantheon Macroeconomics.
“The MPC, therefore, will see nothing in S&P’s survey to dissuade them from reverting to increasing Bank Rate by 25bp, instead of 50bp, at this week’s meeting,” she thinks.
The EY ITEM Club doesn’t expect a significant uptick in manufacturing activity this year given the growing impact of higher interest rates on household and corporate budgets.
There was some good news with the survey pointing to another fall in input cost inflation in the goods sector, adding to other leading indicators showing growing evidence of disinflation.
“But given the Bank of England’s focus on inflation in the services sector, this probably won’t have much bearing on its next interest rate decision later this week,” the economic thinktank said.
11.07am: European equities on the back foot
After a bright start the FTSE 100 has fallen back, now down 38 points, at 7.662, although the losses are steeper in Europe.
In Paris, the Cac-40 is down 1.0% at 7,422 while in Frankfurt, the Dax is 0.9% lower at 16,293.55.
Disappointing manufacturing data hasn't helped in the UK and Europe with the eurozone's manufacturing sector activity hitting a 38-month low in July.
The Hamburg Commercial Bank eurozone manufacturing purchasing managers' index fell to 42.7 points in July from 43.4 points in June. It was in line with the previous flash estimate.
The declines came on the back of a decline in China as well where the Caixin manufacturing PMI, slipped to 49.2 in July from 50.5 in June, undershooting analysts’ forecasts of 50.3.
10.40am: Man Group slides on disappointing earnings mix
Back to the FTSE 250 Man Group PLC (LSE:EMG) is 7.6% lower at 220.55p despite a jump in assets under management as analysts highlighted a disappointing mix skewed to lower margin business.
"Man Group's core earnings were generally in line, and while AUMs and flows were a beat, the mix was not in Man Group's favour (more towards the lower-margin long-only strategies). As a result, we expect a moderately negative response for the shares," analysts at UBS said.
Assets under management at June 30 totalled US$151.7bn, rising 5.9% from US$143.3 billion at the end of December. It reported net inflows of US$2.6bn during the half year, and US$1.5bn for the second quarter.
9.54am: Manufacturing weakens further in UK and Europe
The downturn in the UK manufacturing sector took a turn for the worse in July, as rates of contraction in output, new orders and employment all accelerated, latest figures showed.
The seasonally adjusted S&P Global/CIPS UK manufacturing PMI fell to 45.3 in July, down from 46.5 in June, its lowest reading in the year-so-far and joint-weakest since May 2020.
The report showed increasing signs of market weakness also led to cutbacks in purchasing activity and inventory holdings, as manufacturers aimed to protect cash flow and operate on a leaner footing.
The #UK followed the #eurozone by posting a steeper downturn in manufacturing activity in July, as rates of contraction in output, new orders and employment all quickened, and the #PMI dropped to 45.3. @cipsnews Read more: https://t.co/uMImCXMuJm pic.twitter.com/oLxaXr7wKq
— S&P Global PMI™ (@SPGlobalPMI) August 1, 2023
The downturn was widespread by sector, with all three broad product categories covered (consumer, intermediate and investment goods) seeing declines in both variables.
Rob Dobson, director at S&P Global Market Intelligence, said: "Although manufacturers maintain a generally positive outlook for the sector, with over half still expecting output to rise over the coming year, other forward-looking indicators show the mire that industry is currently facing."
"Domestic and export demand are weakening, and backlogs of work are declining sharply, all of which likely presages further cutbacks to production, employment and purchasing in the months ahead."
The slump was reflected in Europe where the HCOB Eurozone manufacturing PMI, compiled by S&P Global, fell to 42.7 in July, down from 43.4 in June.
9.47am: Investors tuck into Domino's, shares rise 6.7%
Over in the FTSE 250 and top of the risers is Domino’s Pizza Group which served up a tasty set of earnings sending shares 6.7% higher.
The firm reported a 20% jump in revenue to £332.9mln and an 8.2% rise in underlying Ebitda to £68.7mln.
Analysts at Shore Capital said: “Encouragingly Domino’s continues to execute on its strategy to drive higher collection throughput and take market share.”
Collections growth accelerated, up 20% year-on-year, o 12.2mln orders.
Laith Khalaf at AJ Bell felt this jump showed “consumers are finding ways to save money and still get their favourite food treats.”
“Anyone willing to go to their local store can typically get a big discount on a collection order at Domino’s,” he explained.
Domino’s also plans a further £70mln buy-back programme once the existing one is completed.
Shore Capital pointed out the Group now expects to deliver 2023 financial year underlying Ebitda in a range of £132mln–138mln, ahead of the current consensus of £127.6mln.
9.26am: Returns to investors offset fall in profit at BP
Shares in BP PLC (LSE:BP.) remain in the green, up 1.9%, as an enhanced dividend and new share buy-back programme offset worse-than-expected profits.
Joshua Warner market analyst at City Index: ‘That was a much steeper drop in earnings than expected due to weaker oil trading conditions and tighter refining margins, but that is being eclipsed by BP prioritising shareholder returns after raising its dividend and launching a new share buyback.”
“That will funnel more cash to investors, but means there is less to pay down debt, which rose over US$2bn in the second quarter compared to the first – which is significant considering BP is more leveraged than its peers.”
John Moore, senior investment manager at RBC Brewin Dolphin, feels BP is “still in a robust position,” despite the declining oil price environment.
“The energy company has focused more than rivals on diversifying, and that is called out in today’s update with the completion of the acquisition of TravelCenters of America and its entry into the German offshore wind market,” he pointed out.
“BP also has strong credentials in carbon capture, which offers potential yet to be realised,” he added.
Derren Nathan at Hargreaves Lansdown noted “BP has unashamedly pushed shareholder returns to the top of its priority list and has scope to continue raising the dividend over the rest of the year even if oil prices come under further pressure.”
8.52am: Earnings boost FTSE, Weir takes top spot
The FTSE 100 remains on the front foot and it is earnings that have driven the gains with the top four risers all reporting results today.
Leading the way is Weir Group PLC (LSE:WEIR) which reported a 35% increase in pre-tax profit in the first half to £170mln and a 19% rise in revenue to £1.30bn.
The firm also expects operating profit towards the upper end of the current range of analysts' expectations for the full-year.
“It was a really good and solid 1H from Weir,” broker Peel Hunt commented.
“The reality is a consistency in delivery, underpinned by growth, and in our view this still has to be fully reflected in the valuation,” it added.
HSBC is in 2nd spot after its bumper profits while in third place is Diageo, up 2.1%.
The owner of Johnnie Walker, Guinness and Baileys reported an 11% rise in annual sales to £17.11bn and a 5% jump in operating profit to £4.63bn.
BP follows in 4th position, up 1.9% after its numbers.
Derren Nathan at Hargreaves Lansdown noted “BP has unashamedly pushed shareholder returns to the top of its priority list, and has scope to continue raising the dividend over the rest of the year even if oil prices come under further pressure.”
“It was pleasing to see this come without a cut to guidance on capital investment.”
But it was not such good news for Fresnillo which slumped 6.2% after reporting a sharp fall in gross profit and Ebitda to US$282.7mln and US$351.0mln, down 22.7% and 23.5%, respectively.
"Though we have made good operational progress, we are facing higher costs across the business driven by inflation as well as the material impact of the revaluation of the peso against the US dollar, which have resulted in an impact on profitability in the period,” said chief executive Octavio Alvídrez.
8.15am: FTSE 100 boosted by HSBC, fall in shop price inflation
The FTSE 100 opened higher on Tuesday as a fall in shop price inflation offset news that house prices fell at their fastest rate since 2009.
Bumper results from HSBC Holdings PLC also lifted the modd with shares up 2% after the Asia-focused lender reported more than doubled pre-tax profits in the first half of 2023.
Richard Hunter at interactive investor descried the results as a “tour de force.”
“HSBC has brought down the curtain on an otherwise mildly disappointing banks’ reporting season in some style, displaying both growth and financial strength through its sheer scale.”
The bank said pre-tax profit in six months to June 30 jumped to US$21.66bn from US$8.78bn the year before including a US$1.5bn gain on acquiring the UK arm of Silicon Valley Bank.
At 8.15am, London’s lead index was up 11.93 points, 0.2%, at 7,711.34 while the FTSE 250 dipped 32.79 points, 0.2%, to 19,110.97.
UK house prices fell at their fastest rate since July 2009 as rising interest rates depress the property market, according to Nationwide.
In its monthly health check of the property sector, the lender said the average house price fell by 3.8% year-on-year in July, the biggest drop since the aftermath of the financial crisis.
The EY ITEM Club thinks that cracks in the resilience of house prices will grow but believes “a serious house price correction is still unlikely.”
Better news on inflation with the British retail Consortium reporting a fall in shop price inflation which hit its lowest level this year as retailers mitigated the wet weather by offering larger discounts.
According to the latest BRC-NielsenIQ tracker, annual shop price inflation decelerated to 7.6% in July, down from 8.4% in June, its lowest level this year.
Back to the results and BP firmed 2% despite posting a sharp drop in profit in the second quarter.
The oil major reaffirmed dividend and buyback plans and remained confident.
John Moore at RBC Brewin Dolphin said: “BP is still in a robust position when you look over a longer period” highlighting its diversification.
8.02am: House prices fall at fastest pace since 2009
UK house prices fell at their fastest rate since July 2009 as rising interest rates depress the property market, according to Nationwide.
In its monthly health check of the property sector, the lender said the average house price fell by 3.8% year-on-year in July, the biggest drop since the aftermath of the financial crisis.
This time last year UK house prices were rising at a double-digit pace. Now they're falling at the fastest rate since the financial crisis.
Nationwide data shows prices dropped 3.8% in the year to July. Biggest fall in house price inflation for 14 years. pic.twitter.com/GJRyOTCu1i
— Ed Conway (@EdConwaySky) August 1, 2023
That compares to a 3.5% annual drop in house prices in June, and takes the price of a typical home down to 4.5% below the August 2022 peak.
Prices dipped by 0.2% in July alone, on a seasonally adjusted basis, to an average of £260,828, down from £262,239.
Robert Gardner, Nationwide's chief economist said: “Housing affordability remains stretched for those looking to buy a home with a mortgage.”
“While activity is likely to remain subdued in the near term, healthy rates of nominal income growth, together with modestly lower house prices, should help to improve housing affordability over time, especially if mortgage rates moderate once Bank Rate peaks.”
7.57am: Shop price inflation cools further in July
Shop price inflation in the UK eased in July hitting its lowest level this year as retailers mitigated the wet weather by offering larger discounts.
According to the latest British Retail Consortium-NielsenIQ tracker, annual shop price inflation decelerated to 7.6% in July, down from 8.4% in June, its lowest level this year.
Helen Dickinson, chief executive of the BRC, said: "Shop price inflation fell to its lowest level of 2023 and, for the first time in two years, prices fell compared to the previous month."
"Leading the cuts was clothing and footwear, where retailers mitigated wet weather with larger discounts. Food price inflation also slowed to its lowest level this year, with falling prices across key staples such as oils, fats, fish, and breakfast cereals."
Food inflation cooled to 13.4% in July, down from 14.6% in June, the third consecutive deceleration in the food category and the lowest level since December. It was below the 3-month average rate of 14.5%.
7.52am: Greggs back guidance as sales and profit jumps
Greggs PLC (LSE:GRG) has announced growing sales and pre-tax profit during the first half of the year as hopes rest on easing inflation.
Sales in the six months to July jumped 16% to £844mln on a like-for-like basis, “reflecting the exceptional value that Greggs offers to customers,” the company said in a statement.
Pre-tax profit rose 43% to £80mln meanwhile, though this included £16.3mln of exceptional net income thanks to the settlement of a Covid business interruption case.
Reiterating guidance, the company also reported a 1p hike in interim dividend to 16p, while earnings per share climbed 4% to 46.8p.
7.50am: BP profit tumbles dented by weak refining margins
Another FTSE 100 heavyweight reporting is BP PLC (LSE:BP.) which reported a sharp drop in profitability hit by falling refining margins but still rewarded shareholders with a 10% boost to the dividend.
“Another quarter of performing while transforming. Our underlying performance was resilient with good cash delivery - during a period of significant turnaround activity and weaker margins in our refining business,” chief executive Bernard Looney said.
In the three months to June 30, replacement cost profit in the three months to June 30 reached US$2.59bn down from US$8.45bn a year ago and US$4.96bn in the previous quarter.
Operating cash flow totalled US$6.29bn from US$10.86 the year prior while the dividend was boosted by 10% 7.27 cents from 6.006 cents before.
BP said it intends a further US$1.5bn share buy-back before reporting third quarter results as part of its commitment to using 60% of 2023 surplus cash flow for this purpose.
7.24am: HSBC profit rockets, new buyback
We're off and running with results a strong set of results from HSBC.
The Asia-focused lender launched a new US$2bn share buyback and revised its guidance upwards as profit in the first half of 2023 more than doubled.
The bank said pre-tax profit in six months to June 30 jumped to US$21.66bn from US$8.78bn the year before including a US$1.5bn gain on acquiring the UK arm of Silicon Valley Bank.
Revenue increased by 50% to US$36.9bn from US$24.6bn driven by higher net interest income in all businesses due to interest rate rises. Net interest income jumped to US$18.26bn from US$13.39bn.
"There was good broad-based profit generation around the world, higher revenue in our global businesses driven by strong net interest income, and continued tight cost control," said chief executive Officer Noel Quinn.
Reflecting the strong performance, HSBC announced a second interim dividend of US$0.10 per share and a share buy-back of up to US$2bn, which is expected to be completed within three months.
Looking ahead, HSBC raised its guidance for return on tangible equity for 2023 and 2024, now expecting to reach the mid-teens, excluding the effects of material acquisitions and disposals. Back in May, it had guided for "at least" 12%.
It also upped 2023 full-year guidance for net interest income to above US$35bn from a previous forecast of “at least” US$34bn.
7.00am: FTSE seen flat ahead of earnings
The FTSE 100 is expected to make a subdued start to the trading as investors await another deluge of earnings.
Spread betting companies are calling London's lead index little changed after closing up 5.14 points at 7,699.41 on Monday.
Updates from BP, Diageo, HSBC, Weir, Greggs are amongst those in the corporate calendar while inflation is back in the news on shop price inflation eased once more in July.
Overnight, the Reserve Bank of Australia left its key interest rate unchanged, with the central bank saying previous hikes were "working" but the outlook was uncertain.
The pause is the second in a row, following a string of rises aimed at taming runaway prices.
In New York, markets rallied into the close leaving the Dow, S&P and Nasdaq all higher.
In Asia, China's manufacturing sector fell into contraction in July, with the Caixin manufacturing purchasing managers' index recording a level of 49.2 points in July down from 50.5 in June.
Markets though were mixed with gains in Tokyo and falls in China and Hong Kong.
Aside from the earnings updates there is a raft of manufacturing PMIs to come in the UK, Europe and the US.