Morning Market Pulse - easyJet flying into second-half storm?


Mike van Dulken at Accendo Markets, commented to clients this morning:


FTSE 100 called to open +20pts at 7300, once again extending last week’s bounce off the floor of a multi-month rising channel. Bulls need a break above 7325 overnight highs, to retest the recent 7369 peak. Bears require a breach of short-term rising support around 7280 to end the bounce. Watch levels: Bullish 7330, Bearish 7275

Calls for a positive open come after a rally in Asia equities, fuelled by a pick-up in China Manufacturing sentiment, which returned to growth and helped to counter recent jitters about slowing global growth. Just a blip, or Beijing stimulus starting to work?

FTSE off its highs on account of continued gains for both GBP (vs USD). That said, oil prices are building on last week’s highs and Copper is getting a boost from the China data, which should help FTSE Miners. In turn, Gold prices lower, in tandem with bond yields, as risk appetite improves.

In corporate news this morning;

easyJet says H1 in line with views, but cautious on H2; Expects H1 revenues +7.3%, but costs +18.8% and rev per seat -7.4% due to capacity +14.5%; full year guidance unchanged; blames brexit for near-term softness; will be flying as usual after Brexit.

The FT reports that the new limits on fixed odds betting terminals could lead to the Gambling sector seeing a third of outlets close, with many highly reliant on the machine for profits. Watch the likes of GVC, William Hill, Paddy Power Betfair and Rank, as well as online rivals 888 and Playtech.

Rio Tinto sees 2019 iron ore output at lower end of guidance after Australian cyclone. Babcock Babcock has lined up Rolls-Royce’s Ruth Cairnie as Chairman. SSE has refinanced a 5yr £1.3bn revolving credit facility.

Serco signs £140m pact for Dubai metro extension. Ferrexpo expects to publish FY results on or before 25 April. Independent review on charitable donation ongoing, but may not be complete in time for FY results.

AstraZeneca has raised £2.69bn in the share placement it announced Friday to part fund the Daiichi deal and pay down some debt. Oncology drug Sulumentinib granted US breakthrough therapy. Polymetal announces first-strategic partnership (70% stake; $1.9m cash investment) for early-stage exploration in Taimyr Peninsula, Russia

The Telegraph reports British Land has sold a 45 pub portfolio to a property investor for £130m. Sports Direct says it has received support from Debenhams shareholders about protection of interests and appointment of Mike Ashley as CEO.

In focus today:

Another round of indicative votes in the UK Parliament this afternoon, trying anew to find consensus on Brexit. The PM may also try to push through yet another meaningful vote this week. With less than two weeks until the Brexit deadline of 12 April, the issue continues to dominate.

US-China trade talks move to Washington, where markets will be hopeful of further positive rhetoric on progress to support risk sentiment. Watch those FTSE Miners, and bond yields.


The US Jobs report on Friday will be the data point of the weekToday, however, listen out for final PMI Manufacturing reads for Europe, the UK and US, as well as flash Eurozone inflationUS Retail Sales and US ISM Manufacturing.

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