UK traders have had their sights set on this morning’s inflationary figures and the drop in the CPI below the expected 2% to 1.9% is the first time since November 2009 that the Bank of England has seen its benchmark inflation below its target.
The mid-morning ZEW economic sentiment figures have been truly awful, and have compounded the already negative market performance of European equity indices. This is the start of a very busy week of economic data releases that look set to pick up the pace as the days tick by. The latest Eurogroup meeting looks set to disappoint the Greek ruling party as any hopes of an early easing in bailout terms appear to have been quashed by Dutch finance minister, Jeroen Dijsselbloem, who is currently presiding over the Eurogroup.
As anticipated by the markets, Poundland has confirmed that it will be seeking a quote on the stock exchange and completing an IPO. As yet the IG grey market for the company has only seen fleeting interest, but this looks set to change with today’s announcement.
The improving global recovery and upturn in consumer confidence has seen InterContinential Hotels Group post a 10.4% increase to its profits in 2013, and outline an optimistic view of the year ahead.
BHP Billiton, the multinational mining company, has also posted improving first-half profits. They are up by over 30%, enabling the company to increase its dividend by 3.5% due largely to the cost-cutting measures and improved productivity the company has seen in the last 18 months.
Refreshed after a long weekend US traders will once again be back at their desks and, having seen the progress made by their UK counterparts, will no doubt be keen to make up for lost time. Although most of the important economic data out today covers Europe, this afternoon's Empire State Manufacturing Index data will warrant close scrutiny. Ahead of the open, we expect the Dow Jones to start 20 points lower at 16,134.