Widening UK trade balance adds to negativity

Even oil’s continued bounce can’t prevent the FTSE from drifting by 20 points in early trading.

Shire sign
Source: Bloomberg

This morning’s European trade balance figures will only serve as the entrée to the more meaty issue of US non-farm payrolls this afternoon, when markets are sure to be given more of a directional steer. 

Having started his week off so well in Paris on Sunday, the Greek finance minister will now be heading home licking his wounds following the inflexibility shown by his German counterpart Wolfgang Schauble. Both Brent crude and US light crude have continued their resilient moves higher, with Brent even flirting with the idea of tackling the $60 level.

Shire, the UK-based pharmaceutical company, has become the latest corporate miscreant to have its tax avoidance tactics brought under the public spotlight. The use of accountancy firm PricewaterhouseCoopers to engineer a reduced liability to the government has gained the ire of a panel of British lawmakers, eager for these loop holes to be closed. 

Look after the pennies and the pounds will look after themselves; at least that is what Poundland is hoping, following its £55 million acquisition of rival 99p Store Ltd. 

Royal Dutch Shell is still haggling with its US refinery staff as it continues to strike, now for a fifth day. Considering that this reduction to supply is at least a contributing factor to the resilient oil price, and therefore the more optimistic attitude to its share price, Shell might not feel too inclined to rush this process.

The first Friday of the month once again sees the markets focus on the looming US non-farm payroll figures and unemployment rate, offering a double hit of US economic data that always has the propensity to move the markets. 

Last night's Twitter announcement saw shares climb by over 10% in after-hours trading, as investors focused on the partnership with Google rather than the exceptionally slow growth in subscribers. The tie-up with the search engine company could well be a game changer for the social network provider, whose progress had become somewhat stagnated over the last six months. LinkedIn on the other hand, which is considerably further down the road of monetising its users, saw its revenue jump by 44%, beating market expectations.

Ahead of the open we expect the Dow Jones to start 22 points lower at 17,862.

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.