TRY’ing times for FTSE

Calls for a negative open come after Asia drowned in the sea of red at the start of the week following more shocks to the emerging markets FX and equity space. Turkish lira shed more strength overnight as investors were not reassured by Turkish authorities’ attempts to calm the markets. Risk of EMFX contagion was front and centre as South African Rand followed TRY sharply lower.

TRY’ing times for FTSE

FTSE 100 Index called to open -20pts at 7648, after having bounced from last week’s 7635 lows. Bulls need a break above 7666 overnight highs to once again try to regain August highs. Bears require a breach 7630 overnight lows. Watch levels: Bullish 7670, Bearish 7617

Calls for a negative open come after Asia drowned in the sea of red at the start of the week following more shocks to the emerging markets FX and equity space. Turkish lira shed more strength overnight as investors were not reassured by Turkish authorities’ attempts to calm the markets. Risk of EMFX contagion was front and centre as South African Rand followed TRY sharply lower.

GBP is marginally stronger, hurting the FTSE’s large international cohort, while the lower commodity prices (oil, copper, gold all lower) are providing a hindrance to FTSE Resource stocks (dual-listed Miners are down ~1.5% in Australia). Interest for FX safe-havens (mainly JPY) predominates.

In corporate news this morning, Chemring says FY profit is expected £10-20m below expectations (£55m previous) after a fatal explosion stopped work at its Salisbury facility on Friday. Total impact yet to be assessed.

Clarkson H1 revenue -2.7% YoY, underlying pre-tax profit -21.7%, interim dividend +4.3%, the Trading environment is “challenging” and made worse by FX headwinds, but FY outlook is unchanged and conditions are expected to improve in H2.

Plus500 H1 revenue +147%, EBITDA +189%, ARPU +12%, active customers +121% to record level, says it is unlikely H1 exceptional performance will be repeated in H2, but on track to meet FY market expectations.

Brewin Dolphin appointed Siobhan Boylan (current Legal & General Investment Management’s CFO) as new finance director. Petrofac trims oil and gas production by nearly 50% in Mexican operations.

UK house prices fall for a 5th consecutive month, the longest run of decline since 2008 reducing the national average home price to £302,251. London values affected most. Q2 sales fall -7% YoY. Annual price growth slows to 1.6%. Watch FTSE Housebuilders.

In focus, today will be the OPEC Monthly Report. With oil prices off their July-August lows due to persistent supply-side worries (Iran/Venezuela), crude traders will be looking for some direction from the major oil-producing nations, with potential impact on Energy sector names.

With no other significant macroeconomic news due on Monday, it’s the rest of the week to which market watchers cast their eyes. Of particular interest to FTSE, investors will be UK July Consumer Price Inflation (Weds, 9:30am), which is expected firmer at 2.5% YoY after 3 months of weaker than expected price growth. UK prices are keeping above the Bank of England’s 2% target rate and, thus, appear to support the central bank’s rate hiking policy. WatchFTSE Banks and GBP.

In additional macro data this side of the Channel, July’s UK Retail Sales (Thurs, 9:30am) are projected to remain unchanged at 2.9% YoY, though some of this would be due to rising energy costs, as the ex-Fuel metric is seen weaker at 2.8% YoY (after 3% growth in June). Furthermore, UK’s June unemployment Rate (Tue, 9:30am) is yet again expected unchanged at 4.2% for the 5th month in a row.

Otherwise, keep an eye on German Q2 GDP (Tue, 10am), with the 2nd estimate figures appearing to confirm slower 2.1% annual growth (down from Q1’s 2.5%). Watch EUR crosses and DAX equities for read-across.

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