Industrial figures undermine eurozone

Heading into the close the FTSE 100 is up four points, showing very little determination to hit higher levels.

Some disappointing EU industrial production figures have seriously hampered the ability of the European markets to head higher, with the FTSE's performance the best of a bad bunch. Mark Carney’s confirmation that he is sticking with plan A, together with a plethora of corporate news out in the UK, has given equity traders plenty to digest.

UK markets

Royal Mail will be launching an IPO in the coming weeks as expected, and the anticipated £3 billion that the government hopes to raise may be enough to see it sneak into the FTSE 100. The latest round of union strikes is unfortunate, but does highlight some of the potential problems shareholders may face. That being said, our grey market trading has shown there is an undercurrent of enthusiasm for the launch.

Next's first-half profit jumped 8.2%, driven higher by ever increasing online sales – a shift in consumer trends which shows no sign of slowing. Morrisons, the first of the big four food retailers to report figures, has seen a drop in profit of 10%, as its partnership with Ocado has yet to take full effect. Home Retail Group has benefited from the belated good weather, as second-quarter sales boosted all departments, not just Argos.

US markets

President Obama is not having an easy ride at the moment. It is one thing having your overseas policies questioned by the opposition, but having Russian president Vladimir Putin take a swipe at them in the New York Times is quite another.

Apple's performance in early trading has been considerably more measured than the panicked collapse after yesterday’s less than inspiring new iPhone launch. Having been fed a diet of ground breaking, boundary-moving developments by the company previously, yesterday’s internal tweaks left traders underwhelmed.

Due to technical issues with numbers registered in two of the US states, this afternoon's unemployment claims are slightly misleading. US markets may well be given further cause for movement when the latest US Federal Reserve budget balance figures are released, as they could give markets guidance ahead of the debt ceiling being hit, supposedly in mid-October.

Commodities

The fear-driven flight to security looks very much like it has run its course, with gold now below $1350. Technical analysts will no doubt be looking for it to retrace levels back down to the $1320 region before finding any fresh support. 

Copper's struggling performance over the last couple of weeks has not been helped by today’s poor EU industrial production figures, which appear to have given the price a solid kick lower. One commodity that is showing some form is lumber, which is once again adding to its 20%-plus rise from the end of May lows.

FX

Once again the USD/JPY appears to have lost its nerve after hitting the heady heights of ¥100. This inability to weaken is badly stifling the Japanese economy and has damaged the Abenomics drive.

Germany is now only a couple of weeks away from a general election, and the uncertainty that a change in leadership might cause has seen the euro remain jittery. Anticipation of the Fed posting its budget balance tonight (London time) on top of this has caused the EUR/USD to be a little rudderless in today's trading.

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This information has been prepared by IG, a trading name of IG Markets Limited and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. 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. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. International accounts are offered by IG Markets Limited in the UK (FCA Number 195355), a juristic representative of IG Markets South Africa Limited (FSP No 41393). South African residents are required to obtain the necessary tax clearance certificates in line with their foreign investment allowance and may not use credit or debit cards to fund their international account.

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