The dollar weakened overnight as US Fed Reserve minutes, released last night, detailed ongoing inflation nervousness. US inflation climbed by 0.1% in July taking the year-on-year consumer price index marker to 1.6% – still way below the Federal Reserve’s 2% target.
The minutes revealed more ambiguity and argument over the timing of the next US interest rate rise as well as a – still – lack of clarity on shrinking the Fed balance sheet. Sterling and the euro climbed 0.07% and 0.05% consequently taking the two currencies to $1.2896 and $1.1774 respectively (7.10am).
Latest UK retail sales come in for scrutiny at 9.30am; these numbers from the Office of National Statistics are a widely-held barometer of UK spending and confidence. Eurozone inflation and European Central Bank minutes emerge later in the morning.
- UK FTSE 100 7,433.03 +0.67%
- Dow 22,024.87 +0.12%
- S&P 500 2,468.11 +0.14%
- Nasdaq 6,345.11 +0.19%
- Nikkei 225 19,707.56 -0.12%
- DAX 12,263.86 +0.71%
- CAC 40 5,176.61 +0.71%
- Gold 1,293 +0.79%
- Oil WTI 46.86 +0.17%
Screwfix and B&Q owner reveals slower sales
Keeping with the consumer spending theme let’s start with new numbers from B&Q and Screwfix owner Kingfisher. For Q2 to 31 July group sales slump 1.9% on a like-for-like basis to £3.1bn. Kingfisher blames continued French weakness and mixed UK weather comparatives, plus some store closures.
However Screwfix UK sales were up 10.8% on a like-for-like basis “driven by its leading digital capability, new and extended specialist ranges and new outlets”.
Kingfisher adds that “we remain cautious on the H2 outlook for the UK and France as previously guided. We remain on track to deliver our Year 2 strategic milestones”.
Revenues lift for Marshalls
Elsewhere FTSE 250 landscape products operator Marshalls says revenues climbed 8% to £219.1m for the first half of the year with earnings before tax up 13% to £36.7m. Its operating margin lifts from 12.8% to 13.6%. The interim dividend is up 17% to 3.40p.
Marshalls says the Group is outperforming industry growth figures “and the underlying short to medium term market indicators remain supportive”. Its board is “confident of achieving its expectations for 2017”.
China debt grip worry continues
More angst about China and debt worries. "I would say China's debt and leverage is perhaps the biggest worry in the market right now and that is one of the main reasons why Moody's downgraded China's sovereign rating earlier this year," China economist from Standard Chartered, Shuang Ding, told the BBC Today Radio 4 program this morning.
China's credit risk could lead to a new financial crisis the IMF has warned. "Sustainable growth - growth that can been achieved without excessive credit expansion - was likely much lower than actual growth over the last five years," the IMF said earlier this week.
Breaking news: French unemployment falls to five-year low, from 9.9% to 9.5%.