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With US aluminium producer Alcoa providing a strong start to the US earnings season by beating forecasts, and the misfortunes of Greece seemingly appeased, risk appetite is back with a vengeance.
UK manufacturing production continues to be something of a fly in the ointment for the overall economic outlook, falling by 0.8% in May against the 0.3% increase expected. While most UK economic data has been fairly good of late, this adds up to an annualised fall of 2.9% in total and thus may give credence to the recent forward guidance from the Bank of England in respect of the perpetuation of a loose monetary policy. We will see a GDP estimate from the NIESR later this afternoon and with industrial production falling 2.3% in May, we may have to temper expectations.
RBS is one of the high fliers today, leading the index in early trade as rumours abound that minority shareholders may be able to block the chancellor’s intent to cleave the bank into good and bad parts. Given that the idea of a separation of non-performing loans is supposed to create an environment that will allow the good banks to start lending again, George Osborne would do well to look across the Irish Sea and realise that such a notion is not a guaranteed success.
Marks & Spencer's shares are in the red, losing 1.8% this morning despite showing a 0.5% increase in general sales. The share price ratcheted up to 491p in late May, a level not seen since early 2008, and the shares have been subjected to profit-taking over the past six weeks. It may be too early to tell if the Bolland strategy is working, with a lot depending on the new autumn and winter ranges.
The key data from the US today is the NFIB small business index; expectations are for a print of 96.2, marginally higher than last month’s 94.4. The Dow is currently indicating a higher open by 60 points, with the futures currently trading at 15,284.