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Morning Market Pulse - Rio trims iron ore guidance

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

 

Markets Overview:

FTSE 100 called to open +15pts at 7450. Like yesterday, the index continues to consolidate 7400-7460. Bulls need a break above last week’s 7475 highs, to extend a 4-month rising channel towards 7600. Bears require a breach of 7430 to put an end to 3-day rising support. Watch levels: Bullish 7475, Bearish 7430

Calls for a positive open come after Asian stocks got a boost from positive China housing data and better than expected consumer confidence in Australia (dual-listed Miners mixed). It is also despite US stocks closing lower after positive sentiment about a potential US-China trade deal was overshadowed by disappointing earnings reports from big banks, as well as oil prices turning down.

In corporate news this morning;

Rio Tinto has cut its full year iron ore production and shipment guidance by 1.5-2% following Australian cyclones. Q1 shipments were -14% YoY. Note BHP cut guidance early April, and it publishes its own quarterly production report tonight. RIO shares higher overnight in Australia, BHP lower.

Galliford Try warns on profits, expecting to take a hit from a strategic review of its construction unit.

G4S Q1 revenues +4.8% YoY, growth in all regions, divisions. Reiterates positive outlook. Secure Solutions +4.9% (Africa +9.3%, Americas +8.5%), Cash Solutions +4.4% (+1.6% excl. N America +30%.)

Premier Oil successfully tests drill stem in offshore Mexico. Program remains ahead of schedule and under budget.

Shell completes sale of 27% stake in Greater Sunrise Fields to East Timor Government for $300m.

Provident Financial urges shareholders to take no action re offer from Non-Standard Finance.

In focus today:

Data today includes UK Jobs and Wages (9.30am), with unemployment forecast unchanged, but although Wages growth including Bonuses may be a touch stronger, with an inflationary read-across.

ZEW Surveys (10am) for Germany and the Eurozone may cede some ground in April, although Economic Sentiment may have improved.

Across the pond, US Industrial Production and NAHB Housing will be looked to for signs of economic strength as earnings season ramps up.

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