We’ve seen a big move higher in the pound this morning, in a move which took cable to its highest level since November 2009. The move higher in the pound has been pinned on talk of a Vodafone/Verizon deal. BoE Governor Mark Carney was also on the wires last night and reiterated any increases in borrowing costs will be limited and gradual. This has not deterred the pound though as it looks to challenge psychological resistance at 1.68. There is no major economic data out of the UK today, but tomorrow we have CPI due out.
The pair has been subdued over the past couple of weeks, with USD weakness being the primary driver of the move. Today we have Japan’s GDP due out, with a jump to 0.7% (from 0.3%) expected. Should this significant improvement materialise, then we could see yen strength persist and weigh on the pair further in the near term. The data is due out just before Japan starts trading at 10.50 AEDT. A retest of 101 might be on the cards if the current weakness persists.
CBA will be in focus today as it trades ex-div for $1.83. Shares typically trade lower on the back of this and we are likely to see it drop to around $74. This might encourage further near term weakness before the bargain hunters jump in. There is some support in the $74 region and should that be breached then around $72.50 will be the next level to look out for.
ANN 1H results look fairly good at first glance with net income jumping 15% to $65.6 million. The company also experienced good revenue growth and delivered a 17 cent dividend. ANN also reaffirmed FY14 EBIT growth in high single digits to low teens and this should help give its shares a lift today. The company is holding onto $19 and could see some buying off this level today.