FTSE struggles for direction on mixed results

It has been up and down for the FTSE this morning as the index is struggling to find clear direction amidst a set of mixed results from index heavyweights and mid-sized companies.

Shares in mining giant Anglo American dipped despite the company reporting an increase in its copper output, earnings at Anglo-Dutch consumer goods maker Unilever were hit by a Brazilian truck drivers’ strike and sports goods retailer Sports Direct reported a plunge in full year pre-tax profits because of the negative effect from a £85.4 investment in retailer Debenhams. European indices suffered the same fate and the CAC and the DAX traded down 0.57% and 0.37%, respectively.

US markets to provide a lead later today

But as the reporting season continues in the US, European markets will take their cue from the US later today. The Dow Jones Industrial Average has been on the longest upward streak in two months while the Nasdaq continues to trade very close to its record highs.

Key US initial jobless claims, the indicator of the number of people out of work, is due out later today, but analysts warn that summer data tends to be skewed due to seasonal factors and is a less reliable indicator of the broader state of economy.

Pound continues to decline ahead of retail sales data

The pound continues to feel the after effects of the unexpected UK inflation data published Wednesday which showed that consumer prices held steady at 2.4% last month despite expectations of a slight increase. The currency market has been pinning its hopes on a Bank of England interest rate hike in August, but now that this decision looks less likely the pound plunged to a 10-month low against the dollar after the inflation data was published and continues to slide further this morning, trading down 0.35% against the dollar at 1.3023 and down 0.16% against the euro at 1.1213.

Yields on 10-year UK government bonds are trading at their lowest level since May. Retail sales data due to be published at 9.30 Thursday will provide some more insight into the state of the UK economy and provide hints on whether the BoE will change its August rate hike plans.


Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.