Japanese household spending rose 2.3% in June – the biggest monthly gain since midsummer 2015, a welcome upturn for PM Shinzo Abe – but domestic inflation at 0.4% remains frustratingly low, according to new overnight data. Despite the Japanese spending uptick stagnant wages remain a drag-anchor on the economy.
Overnight the Swiss franc saw some more heavy selling amid more optimism on the euro. At 7am the euro was trading close to $1.17 at $1.695 while the pound was at $1.3086, daily rises of close to 0.20% for each. The euro was at 1.1312 against the Swiss franc, up more than 2.5% in the last week.
Plenty of market news this morning including Virgin, Rightmove, IAG and BT. EU business climate indicators and economic sentiment emerge at 10am while University of Michigan confidence numbers arrive at 3pm.
- UK FTSE 100 7,443.01 -0.12%
- Dow 21,796.55 +0.39%
- S&P 500 2,475.42 -0.10%
- Nasdaq 6,382.19 -0.63%
- Nikkei 225 19,930.04 -0.74%
- DAX 12,212.04 -0.76%
- CAC 40 5,186.95 -0.06%
- Gold 1,265.00 -0.12%
- Oil WTI 48.91 -0.24%
Branson gives up control of Virgin Atlantic
We start with news that Richard Branson has agreed to sell Air France-KLM a 31% stake in Virgin Atlantic meaning Virgin’s own stake dips from 51% to 20%. The deal is part of an existing four-part arrangement with Delta which has been in operation for nearly five years.
“Delta has helped us considerably with feed from America,” Branson wrote in a letter to shareholders and staff, “but because we don’t have more slots at Heathrow or Gatwick we’re unable to enjoy feed from Europe or provide extra onward journeys for those customers we are now carrying to London.”
The airline industry has consolidated over Virgin Atlantic’s lifetime he wrote “and it’s now our turn to put ourselves at the heart of an important alliance".
Meanwhile profits climb for BA owner IAG
Staying in the air Virgin rival IAG, owner of British Airways, says second quarter operating profit surged to €805m compared to €555m a year ago.
"The underlying trend in unit revenue improved, benefitting partially from Easter and a weak base last year,” said IAG. "Non-fuel unit costs before exceptional items are up, at constant currency. These costs include the financial impact of the power failure which affected British Airways' customers.”