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Morning Report - 24 November 2017

Yesterday’s UK 100 Leaders Close (p) Chg (p) % Chg % YTD
Mediclinic International 525 16.5 3.2 -31.9
Sage 806 24 3.1 23.1
ITV 152.4 3.6 2.4 -26.2
Berkeley Group 3730 73 2.0 32.8
easyJet 1376 26 1.9 36.9
Yesterday’s UK 100 Laggards Close (p) Chg (p) % Chg % YTD
Centrica 138 -25.3 -15.5 -41.1
Babcock International 682.5 -23 -3.3 -28.4
National Grid 866.1 -25.2 -2.8 -16.6
Johnson Matthey 3068 -73 -2.3 -3.6
Vodafone 225.4 -3.35 -1.5 12.8
Major World Indices Mid/Close Chg % Chg % YTD
UK UK 100 7,417.2 -1.8 -0.02 3.8
UK 20,006.0 -7.8 -0.04 10.7
FR CAC 40 5,379.5 26.8 0.50 10.6
DE DAX 30 13,008.5 -6.5 -0.05 13.3
US DJ Industrial Average 30 23,526.3 -64.5 -0.27 19.0
US Nasdaq Composite 6,867.4 4.9 0.07 27.6
US S&P 500 2,597.1 -2.0 -0.08 16.0
JP Nikkei 225 22,550.9 27.7 0.12 18.0
HK Hang Seng Index 50 29,875.7 167.7 0.56 35.8
AU S&P/ASX 200 5,982.6 -3.6 -0.06 5.6
Commodities & FX Mid/Close Chg % Chg % YTD
Crude Oil, West Texas Int. ($/barrel) 58.45 0.14 0.23 8.5
Crude Oil, Brent ($/barrel) 63.44 0.11 0.17 11.6
Gold ($/oz) 1291.45 -0.75 -0.06 12.1
Silver ($/oz) 17.11 0.04 0.22 7.2
GBP/USD – US$ per £ 1.3289 -0.12 7.6
EUR/USD – US$ per € 1.1849 -0.02 12.7
GBP/EUR – € per £ 1.1215 -0.12 -4.4
UK 100 Index called to open flat at 7415

UK 100 : 2.5-month, 6-hourly

Click graph to enlarge

Markets Overview: (Source: Bloomberg, FT, Reuters, DJ Newswires)

UK 100 Index called to open flat at 7415, holding yesterday’s break back above 7405 to keep alive the rebound from last week’s 7350 lows. Bulls need a break above overnight/Thurs highs of 7425  before any challenge on the mid-week 7460 peak. Bears require a test of 7405 overnight lows to open the door for a retrace towards 7350. Watch levels: Bullish 7425, Bearish 7405

Calls for a flat open come after another session in Asia overnight, and despite a waning in GBP strength as the USD found support. In geopolitics, Germany may be closer to avoiding fresh elections via grand coalition talks, however, Ireland may be a step closer as scandal (police/deputy PM) threatens the Irish minority government’s stability at a key juncture in Brexit negotiations regarding the Irish/NI border.

In Asia, Japan’s Nikkei/Topix are higher on their return from Thanksgiving, helped by the Yen coming off its highs and the best PMI Manufacturing read since Q1’14. Australia’s ASX underperforms (just) despite firmer oil and metals prices that may support UK Index listed Miners/Oil majors along with a slightly weaker GBP.

China is still under pressure after yesterday’s drop on credit bubble fears, with Fitch saying its banks face continued regulatory scrutiny. However, weakness has been mitigated by a lowering of import duties on consumer goods.

In corporate news this morning Provident Financial’s executive chairman dies suddenly. Rio Tinto and Sinosteel have agreed to a third extension to their Channar Mining JV, delivering an additional 10m tonnes of iron ore from Western Australia. William Hill confirms very preliminary discussions with CrownBet  about possible merger with William Hill Australia. The FCA says Libor will remain on life support, backed by investment banks until it is phased out in 2021.

US equity markets were closed yesterday for Thanksgiving, and will also close early today (1pm ET/6pm GMT).

US Crude has traded a fresh 29-month high, trading above $58.5, as disruption at the major US Keystone pipeline continues, while global benchmark Brent trades higher as investors become increasingly confident that an extension to OPEC-led production cuts will be approved next week. A draft agenda of the Vienna meeting shows it is only expected to last 3 hours, considerably shorter than usual, improving hopes of a quick and easy deal.

Gold has retreated marginally from falling highs resistance at $1293 overnight as the ongoing underperformance of the US dollar has helped the precious metal test the key level. The safe haven asset, having fallen to overnight lows and support at $1290, has since pared some losses, although unless a break out from resistance is made, gains will likely be limited.

In focus today – another Thanksgiving quietened session – will be German IFO Surveys (9am), forecast largely unchanged, with Business Climate holding around October record highs (data since Jan 1991), Expectations near a 7yr best and Current Assessment at its best in over 10yrs.

This afternoon, US PMI Manufacturing (2.45pm) is forecast to add a shade to last month’s jump close to January’s 2017 highs, while Services remains unchanged since September.

Speakers today are limited to ECB members; Coeure (8am) opening remarks at a Banque de France conference on “Econ and Financial Regulation in Era of Big Data”; Nouy (10.30am) giving keynote speech on European Banking Regulation and Vice President Constancio speaking at the award of the Germán Bernácer Prize for European economists under 40.

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This research is produced by Accendo Markets Limited. Research produced and disseminated by Accendo Markets is classified as non-independent research, and is therefore a marketing communication. This investment research has not been prepared in accordance with legal requirements designed to promote its independence and it is not subject to the prohibition on dealing ahead of the dissemination of investment research. This research does not constitute a personal recommendation or offer to enter into a transaction or an investment, and is produced and distributed for information purposes only.

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