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.