(Alliance News) - Stocks in London are set to open on a subdued note ahead of an eagerly awaited US inflation print.
The consumer price index reading is expected to show the annual inflation rate softening to 8.1% in August from 8.5% in July, according to FXStreet. The figure is being keenly watched ahead of the Federal Reserve's meeting on Thursday next week, when the US central bank is expected to carry out its third consecutive 75 basis point interest rate hike.
Out before this was a UK labour market update, which showed the unemployment rate unexpectedly declined in July, while wage growth accelerated.
The pound spiked following the data, having traded below the USD1.17 mark before the release of the labour market update.
The Bank of England was due to meet this Thursday, but the meeting has been pushed back by one week due to the death of Queen Elizabeth II.
In early UK company news, Ocado Retail, an online grocery joint venture between Ocado and Marks & Spencer, warned that the cost-of-living crisis is pushing down its average basket value. Magazine publisher Future is confident on its annual profit outturn.
Here is what you need to know ahead of the London market open:
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MARKETS
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FTSE 100: called down 2.33 points at 7,470.70
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Hang Seng: up 0.4% at 19,446.62
Nikkei 225: closed up 0.3% at 28,614.63
S&P/ASX 200: closed up 0.7% at 7,009.70
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DJIA: closed up 229.63 points, or 0.7%, at 32,381.34
S&P 500: closed up 43.05 points, or 1.1%, at 4,110.41
Nasdaq Composite: closed up 154.10 points, or 1.3%, at 12,266.41
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EUR: up at USD1.0144 (USD1.0128)
GBP: up at USD1.1716 (USD1.1698)
USD: down at JPY142.17 (JPY142.35)
Gold: down at USD1,723.67 per ounce (USD1,731.11)
Oil (Brent): down at USD94.09 a barrel (USD94.63)
(changes since previous London equities close)
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ECONOMICS
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Tuesday's key economic events still to come:
08:00 CEST Germany consumer price index
08:00 BST UK grocery market share figures
00:01 EDT US employment outlook survey
08:30 EDT US CPI
08:55 EDT US Johnson Redbook retail sales index
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The UK jobless rate edged down to 3.6% in the three months to July, from 3.8% in the previous three-month period. Market consensus, according to FXStreet, had expected the rate to remain stable at 3.8%. The latest jobless rate was the lowest since May to July 1974. Total pay, which includes bonuses, grew 5.5% on-year over the three-month period, ticking up from 5.2% the prior period. Regular pay, which strips out bonuses, grew 5.2%, picking up from 4.7%. Both figures beat consensus, which had forecast growth of 5.2% and 5.0% respectively. However, in real terms - meaning adjusted for inflation - total pay fell by 2.6% and regular pay dropped by 2.8%. While July's fall in real pay was slightly smaller than the 3.0% gap seen last month, the ONS highlighted it remains "among the largest falls in growth since comparable records began in 2001".
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Germany confirmed recording a 7.9% consumer price inflation rate in August, up from 7.5% in July. On an EU-harmonised basis, inflation was 8.8% in August, again matching the flash reading and up from 8.5% in July.
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BROKER RATING CHANGES
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Citigroup cuts South32 to 'neutral' (buy) - price target 270 (280) pence
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HSBC raises Entain to 'buy' (hold) - price target 1490 (1760) pence
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Deutsche Bank raises BT to 'hold' (sell) - price target 140 pence
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COMPANIES - FTSE 100
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Online grocer Ocado Group reported sales growth for Ocado Retail in its third quarter, but warned that shoppers are checking out with smaller baskets and seeking value-for-money items due to the cost-of-living. Ocado Retail is a joint venture between Ocado and Marks & Spencer. For the 13 weeks to August 28, revenue edged up 2.7% to GBP531.5 million, with average orders per week rising 11% to 374,000. Ocado also flagged "record numbers" of new customers. However, the average basket value was down by 6% in the period, with a greater decline experienced later in the quarter. "Notwithstanding positive customer growth, the accelerating trading down and smaller baskets, particularly over the last few weeks, mean that we now expect to see a small sales decline in FY22 and close to break-even Ebitda," said Ocado. In Ocado's half-year results, it had guided to low single-digit growth at Ocado Retail for the full-year.
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abrdn said it has sold 43.0 million shares in HDFC Life Insurance, equivalent to around a 2.0% stake, for GBP262 million. The sale was conducted through subsidiary abrdn (Mauritius Holdings) 2006. The company continues to hold a 1.7% stake in HDFC Life, worth around GBP227 million. "The proceeds will further strengthen the company's capital resources supporting investment in the business and enabling the company to continue to return capital in excess of business needs," it said.
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COMPANIES - FTSE 250
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Future said it expects full-year adjusted operating profit to be at the upper end of market forecasts. It has placed the analyst consensus range at GBP266.4 million to GBP270.7 million. The magazine publisher upgraded guidance after its "encouraging performance" continued. "Operating leverage and cash conversion have remained strong, with continued deleveraging following the acquisition of Who What Wear," it added.
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OTHER COMPANIES
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Kape Technologies said it plans to raise around USD110 million to USD200 million via a share placing to institutional investors and an offer to retail investors to enhance its firepower for acquisitions. "Ongoing turbulent global market conditions have given rise to a number of highly attractive potential acquisition opportunities at compelling valuations which Kape believes could enhance the group's offering," the company said.
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By Lucy Heming; lucyheming@alliancenews.com
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