Mike van Dulken at Accendo Markets, commented to clients this morning:
FTSE 100 called to open flat at 7370, holding its uptrend, looking for another test of 7400, but testing rising support. Bulls need a break above yesterday’s 7380 overnight highs, then Tuesday’s 7420 5-week best. Bears require a breach of 2-day rising support at 7360 and then 1-month intersecting support at 7345. Watch levels: Bullish 7380, Bearish 7345
Calls for a flat start come courtesy of gains in the US and Asia, with higher oil prices from conflict fears boosting the key Energy sector. Sentiment nonetheless tempered ahead of key China data (see below) around the European open.
Gold back at recent $1347 highs on conflict fears tempered risk appetite. Oil calmed after yesterday’s events in the Strait of Hormuz and OPEC report, off its $63 highs, still in a downtrend. Copper flat to down ahead of China data. GBP flat around 1.268 even with the threat of a new hard-Brexit Tory leader.
In corporate news this morning;
S&P upgrades BA-owner IAG To 'BBB', Outlook Stable, believing solid EBITDA performance will continue in 2019-20, passenger growth and non-fuel cost savings offsetting pressure from a larger fuel bill and weak yields, and ample cash flow for investment.
Ofgem fines Shell Energy Retail for overcharging 12K tariff cap customers; £390K for overcharging, £200K voluntary redress
Wizz Air reports 56.5g CO2 per passenger/km in May 2019, -4.4% YoY; aims to cut by 30% over next decade, smallest Co2 footprint per airline passenger, helped by modern fleet, avg age 4.7yrs.
Amigo Holdings CEO steps down due to health issues, replaced by CCO Hamish Paton.
Ascential says trading in line with full year expectations; Marketing segment expected +12% organic in H1; Product Design expected +9% organic; Sales expected +3% organic.
SThree H1 performance in-line with management expectations; Group net fees +9%, 86% from outside UK & Irl (+4pts); Double digit growth in all regions outside UK&Irl. Contracts (74% of net fees) +12% (Q2 +13%), Permanent -1% (Q2 -2%); FY expectations unchanged.
In focus today:
China Industrial Production and Retail Sales (8am) could move sentiment on risk assets, impacting FTSE Miners. Expectations are for slightly stronger growth for the former, with the latter rebounding from a weak April, countering the weak Imports growth earlier in the weak.
Across the pond, will data alter hopes of a Fed rate cut? US Retail Sales (1.30pm) are forecast stronger in May (Headline and ex-Autos), continuing the recent up one month, down the next trend. Industrial and Manufacturing Production (2.15pm) are both seen recovering from a weak April. US Consumer Confidence (3pm) likely a shade lower in June.
Bank of England Governor Carney (1.55pm; text released) speaks at the “Women in Banking & Finance 22nd Anniversary Awards for Achievement lunch, London”. Eurozone finance ministers also meet for the latest ECOFIN meeting, stepping up calls for Italy to respect fiscal rules.