Remember, Remember…

Mike van Dulken and Artjom Hatsaturjants at Accendo Markets, commented this morning:

Remember, Remember…

FTSE 100 Index called to open -10pts at 7085, hugging the lower bound of a 7075-7195 trading range from middle last week. The range represents consolidation of the prior week’s rebound from a flirt with 2018 lows. Bulls need a break above the 7115 highs of late Friday. Bears require a breach of Wednesday’s 7075 breakout. Watch levels: Bullish 7115, Bearish 7075

Calls for a negative open come after a downbeat start to the trading week, as Asian markets digest the White House pouring cold water on the prospect of a swift US-China trade deal (backtracking on Trump’s promise of a “great deal”).

President Xi pledged more support for Chinese economy and better IP protections for foreign businesses at a Shanghai trade expo, though it is yet to coax markets out of negative territory. A weak China Caixin PMI Services for October (50.8 vs. 52.9 est. vs. 53.1 prev.) isn’t helping either.

The FTSE is seen holding slightly below Friday’s close thanks to GBP trading close to November highs, despite cracks appearing within the UK’s Brexit negotiating team, with DExEU Minister Raab clamouring for a more hard-line approach to the Irish border conundrum.

In corporate news this morning FTSE Banks may be sensitive to EU Stress test results for Barclays and Lloyds showing Barclays’ Core Tier 1 capital ratio falling as low as 6.0% (5.5% pass rate) under adverse macroeconomic scenarios and Lloyds not faring much better at 6.78%. The FT reports Schroders approaching troubled Swiss fund GAM about acquiring its Systematic division/Cantab quant fund (acquired 2016, value write-down expected this year).

Micro Focus trading in-line, with improved H2 revenue trajectory. Sees full year like-for-like revenue at top of -6% to -9% range. Extends share buyback to $400m. Brian McArthur-Muscroft (ex-Paysafe) named new CFO, from Q1 2019.

ITV appoints Chris Kennedy CFO from 1 Feb (currently CFO at Micro Focus, prev. CFO at ARM and easyJet; spent 17yrs at EMI); succeeds Ian Griffiths who retires end-March. Ryanair Oct traffic +11% with 96% load factor (Ryanair 12.6m passengers, +7%; Lauda 500K passengers, 89% load factor); cancelled circa 300 flights due to strikes, weather and staff shortages.

Capita confirms completion of disposal of ParkingEye for £235m cash. RPC requests extension of deadline for discussions with Apollo Global Management and Bain Capital until 5pm 6 Dec (prev 5pm 5 Nov). WANdisco secures $1m contract with leading information and communications technology provider in China, expanding existing relationship with key client; proportion of revenue will be recurring.

Sirius Minerals signs Teesside port construction contract; price in line with capital re-estimate of 6 September. Procurement of major construction packages for stage 2 financing near completion with only MTS fit-out package outstanding.

Hiscox Q3 like-for-like premiums +11.4% YoY (Retail +12.5%, London +10.4%, Re & ILS +9.9%). Expects growth to “moderate” through rest of year due to natural catastrophes and large claims. Brexit preparations well-advanced ($15m hit in 2018), EU subsidiary to start business from 1 Jan.

Telford Homes acquires part of Greystar development in Greenford, North West London for £28.4m (14% of 1,965 homes; 194 homes worth £97m + 84 affordable homes for shared ownership).

In focus today, in terms of macro data, will be UK’s October Services PMI (9:30am), seen weakening for the second month in a row to 53.3 (from 53.9 prev.). Over in the US, final Services PMI (2:45pm) is expected to confirm another strong expansion in October, while another services sector gauge, ISM Non-Manufacturing (3pm), is forecast to pull back to 59.3, down from a record high 61.6 in September, and more in line with previous data this year.

In terms of speakers, ECB Vice President de Guindos, (1pm) gives a keynote address in Brussels on managing financial crises. There’s also a Eurogroup EcoFin meeting (2pm) to discuss Eurozone integration, the budget, the new bailout fund and deposit guarantee scheme, all of which is pertinent to the ongoing Brussels-Rome standoff over fiscal discipline.

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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