A major market currency event today: the European Central Bank holds its much-anticipated meeting which could give guidance, post-discussion, on its stimulus program, currently €60bn per month. The euro’s strength – up more than +13% against the dollar this year – makes policy change tricky however.
On the surface, economic recovery appears on track – no European member saw negative economic growth in the last quarter. But it’s a tightrope, especially as a weak dollar and strong euro means interlocking trouble where countries have currencies linked to the dollar (China). Expect some talk around inflation – a substantial (needed) lift is still some way off.
Overnight the euro slipped -0.04% to $1.1917 while the pound was down -0.08% at $1.3037. Gold was +0.11% up at 1,335.43 while WTI crude was -0.18% down at $49.07. Hurricane Harvey and its aftermath has taken up plenty of attention but OPEC quotas look set for more fresh examination given increasing output from Nigeria and Libya.
- UK FTSE 100 7,354.13 -0.25%
- Dow 21,807.64 +0.25%
- S&P 500 2,465.54 +0.31%
- Nasdaq 6,393.31 +0.28%
- Nikkei 225 19,388.02 +0.15%
- DAX 12,214.54 +0.75%
- CAC 40 5,101.41 +0.29%
- Gold 1,340.30 +0.10%
- Oil WTI 49.06 -0.22%
Bovis sees profits and earnings slip
No major surprises from Bovis Homes though pre-tax profits and earnings per share are both down for the first half of the year on existing concerns. Pre-tax profits fall -31% to £42.7m while earnings per share are -30% down to 25.7p.
Bovis blamed the profitability weakness on “legacy customer service costs, overweight operating structure, investment to change the business, and defence costs”. However it counters with stronger selling prices, up +9% to £277,400. Bovis claims 96% of 2017 sales are now secured. Up to £180m will be returned to shareholders over the next three years.
It adds: “Clear future visibility with all land for 2018 completions secured with 97% already in construction and 90% of land for 2019 under control”. Bovis shares are up +34.1% year-to-date.
Ashmore funds climb
We move onto emerging markets investment player Ashmore Group. For the full year to 30 June assets under management climb +12% to $58.7bn with 91% of funds outperforming benchmarks, it claims. Revenue growth climbs +11%.
“The Group's business model is delivering as expected,” said CEO Mark Coombs, “with good operating and financial performance resulting in a +31% increase in diluted earnings per share.”
Ashmore claims emerging market assets continue to outperform their developed world counterparts in both fixed income and equity markets.
Breaking news: All major new Jaguar Land Rover model lines will go electric from 2020 the company says.