Deal or no deal?

Artjom Hatsaturjants at Accendo Markets, commented to this morning:

Deal or no deal?

FTSE 100 Index called to open flat at 6996, holding the bounce above Friday’s 6954 lows. Bulls need a break above overnight 7021 highs to extend the bounce further and reverse the negative momentum. Bears require a breach of 6986 overnight lows for another downward test of last Thursday’s 6954 lows. Watch levels: Bullish 7011, Bearish 6980

Calls for a muted open come after a negative start to the week in Asia, where concerns over rising US interest rates continued weighing on equities. Brexit negotiations suffered another setback over the weekend, as PM Theresa May rejected key EU proposals over the Irish border, dealing a blow to negotiations to avert a hard Brexit. This has sent the GBP sharply lower ahead of an EU leaders summit on Wednesday, helping FTSE’s international names.

Oil prices are trending up (Brent touching £82 handle overnight, helping FTSE Energy names) as the diplomatic conflict between the West and Saudi Arabia over the fate of the missing journalist Jamal Khashoggi led to veiled threats by the Kingdom over supply of crude.

In corporate news this morning, BHP Billiton awarded a A$1.2bn coal mining contract to Australia’s CIMIC group. Virgin Money and CYBG reached agreement on the terms of the all-share merger, with the CYBG acquisition of rival challenger bank now complete. Virgin Money shares to stop trading on 15 Oct.

ConvaTec Q3 organic growth +0.4% YoY, Wounds +0.8%, Ostomy +1.5%, Critical +1.4%, Infusion Devices -3.7%. FY revenue guidance lowered to flat-to-1% (from 2.5-3%) due to inventory policy change by biggest Infusion Devices customer. FY EBIT margin guidance also revised down. CEO Moraviec retires with immediate effect.

Polymetal increased its stake in Veduga gold deposit to 74.3% by purchasing 31.7% stake from Amikan for $19.7m (payable in Polymetal shares). IQE appointed Tim Pullen (current ARM CFO) its new CFO (effective early 2019).

Greencore sells its US packaging subsidiary ($1.4bn 2017 revenue) to Hearthside Foods for £817m, subject to regulatory approval. £509m to be returned to shareholders via a 72p special dividend. Company plans to focus on UK market following the sale in late November.

In focus today – in terms of macro data – US Retail Sales (1.30pm) may offer inflationary read-across to the Fed and USD, especially if growth rebounded as much as expected in September. US Empire State Manufacturing (1.30pm) is expected flat but US Business Inventories (3pm) should post another month of solid growth in August.

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Categories: News
Tags: FTSE

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Accendo Markets

Accendo Markets is an online trading services provider, offering CFDs, spread betting and forex to retail (private) clients. Accendo Markets was established in 2007 and has since gone on to win various awards including ‘2018 Winner of Best CFD provider’ at City of London Wealth Management awards and 2017 & 2018 Best CFD Research Service in ADVFN’s International Financial Awards Accendo Markets Ltd. is authorised and regulated by the Financial Conduct Authority (FCA). For more information, visit www.accendomarkets.com