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The summer lull seems to have started in earnest this morning, as early gains for the London market were given back. Housebuilders Persimmon and Barratt trimmed gains from last week, while the World Cup blues have hit Sports Direct as the shares drop 2.4%. EasyJet was the big loser however, down over 5% on broker news, and trading at its lowest level in over six months.
Inflation data from the eurozone held steady at 0.5%, obstinately refusing to follow the lead higher set by German data last week. With the European Central Bank expected to hold its fire this week and the temporary long-term refinancing operation not coming into force until September, European indices are becoming increasingly vulnerable to disillusionment about the prospects for economic growth.
The Chicago PMI and pending home sales are mere warm-ups for the rest of the week, but it will be interesting to see whether US markets can finish in a positive frame of mind for June after what was a rather perilous week for Wall Street.
The news of some modest success for Iraqi forces has aided a drop in crude prices, with the risk element being scaled back somewhat. With earnings season rapidly coming into view investors will need to know whether the first-quarter slump in US growth was just a one-off, as the Federal Reserve seems to think, or the start of something broader. Ahead of the open, we expect the Dow Jones to start 15 points lower at 16,836.