Major indices in Europe were in the green around midday Friday, as investors await producer price inflation data coming from the US.
The FTSE 100 index was up 19.98 points, 0.2%, at 8,243.32. The FTSE 250 was down 31.65 points, 0.2%, at 21,157.26, and the AIM All-Share was up 2.60 points, 0.3%, at 784.13.
The Cboe UK 100 was up 0.2% at 822.37, the Cboe UK 250 was down 0.1% at 18,423.27, and the Cboe Small Companies was up marginally at 17,318.37.
In European equities on Friday, the CAC 40 in Paris was up 0.6%, while the DAX 40 in Frankfurt was up 0.2%.
‘It’s hard to believe it has only been a week since Labour’s landslide election victory changed the UK’s political makeup. There’s been no shortage of big announcements from Number 11 but the main economic news impacting London markets is rooted in the past, with faster than anticipated economic growth in May slashing expectation of an August interest rate cut by the Bank of England,’ said Danni Hewson, AJ Bell head of financial analysis.
‘Add that to cooler than expected inflation over in the US and it’s created an economic stew that has boosted the value of the pound.’
The pound was quoted at $1.2948 at midday on Friday in London, up compared to $1.2920 at the equities close on Thursday.
On Friday, investors are eyeing producer price inflation data which is due out at 1330 BST.
Francesco Pesole at ING commented: ‘Today, PPI figures may move the market given a lot of the components feed into the Fed’s favourite PCE measure of inflation.’
On Thursday, the Bureau of Labor Statistics reported that the year-on-year consumer price inflation rate was 3.0% in June, cooling from a 3.3% rise in May. According to FXStreet, markets were expecting CPI to come in at 3.1% for June.
On a monthly basis, consumer prices declined 0.1% in June, after being unchanged in May from April. Prices had been expected to register a 0.1% increase this time around, so the latest reading undershot the consensus.
The US is making ‘significant progress fighting inflation,’ President Joe Biden said Thursday, after consumer inflation figures for June came in cooler than anticipated.
‘Prices are falling for cars, appliances, and airfares, and grocery prices have fallen since the beginning of the year,’ Biden added, though conceding that overall costs are ‘still too high’ as he battles to win reelection this year.
A senior Federal Reserve official said Thursday that some central bank policy adjustments will likely be warranted as inflation slows and the labour market gradually cools.
But San Francisco Fed President Mary Daly, in a media interview, did not commit to a timing for this shift, maintaining that officials will remain data-dependent in their decisions.
It is clear that ‘monetary policy is working,’ Daly noted on Thursday.
Stocks in New York were called to open mixed. The Dow Jones Industrial Average and the S&P 500 index were both called up 0.1%, whilst the Nasdaq Composite was called down 0.1%.
The Nasdaq struggled on Thursday, snapping a seven-day winning streak, amid a rotation of tech.
Banking stocks will be in focus, with JPMorgan and Wells Fargo reporting second-quarter earnings around 1300 SAT, and Citigroup an hour later.
The euro stood at $1.0886 at midday on Friday, higher against $1.0872 on Friday. Against the yen, the dollar was trading at JP¥159.16, higher compared to JP¥158.57.
In London’s FTSE 100, water stocks United Utilities and Severn Trent lost 2.5% and 1.6%, respectively, after getting a boost on Thursday.
On Thursday, the UK water watchdog Ofwat said that average water bills in England and Wales are expected to rise by £94 over the next five years. This means that prices will increase by around £19 a year.
On the other hand, oil majors BP and Shell rose 1.4% and 0.6%.
Brent oil was quoted at $86.17 a barrel at midday in London on Friday, up from $85.47 late Thursday.
On AIM, System1 rose 9.2%.
The London-based owner of a marketing decision-making platform said revenue in the first quarter of the financial year to March 31 was £9.2 million, up 53% from £6.2 million a year prior.
Chief Executive James Gregory said: ‘Customer demand was exceptionally strong in the first quarter, somewhat ahead of our own expectation. It’s early in the year but this strong first quarter performance puts us firmly on track for sustainable growth and to achieve our full-year expectations.’
On the other hand, Cadence Minerals lost 8.9%.
The investment and development company said it has raised £750,000, which will be used to fund its the Amapa iron ore project in Brazil.
Gold was quoted at $2,404.30 an ounce, lower against $2,422.61.
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