Global Market Report - August 9

Both Chinese consumer price and producer price inflation were higher than expected for July

Japan’s Nikkei and Topix indices were lower despite a softening of the Japanese yen against the dollar. Economic growth in the country is expected to have rebounded in the second quarter after a weak first quarter – GDP growth is forecast to be 1.4% on an annualised basis in Q2, compared with a 0.6% fall in the first quarter on Q1 2017.

Europe

Travel operator Tui (TUI) reported a fall in quarter profits as the UK heatwave reduced demand for overseas trips among British tourists. The company’s share price slid nearly 9% despite earnings forecasts remaining unchanged for the year. The boom in cruises continues unabated, however, and provided a bright spot in the results.

The FTSE 100 had outperformed eurozone markets yesterday, but today slipped back further than its continental counterparts. Sterling attempted a recovery against the euro and the dollar after recent falls. The blue-chip index was down around 0.5% to 7,736 points in midmorning trading. The pound will be in focus when the Office for National Statistics releases the Q2 GDP figures on Friday at 930am UK time.

Legal & General (LGEN) saw profits fall in the first half but it expects a better second half of the financial year.

In Germany, Adidas (ADS) shares surged 7% on positive results – the sportswear company is the eighth biggest company on the DAX, which was largely unchanged on Thursday morning.

North America

Russia is the latest regime to fall foul of United States sanctions; earlier in the week it was Iran, a move that firmed up oil prices. The Russian rouble came under pressure against the dollar today.

The S&P 500 and Nasdaq are expected to open near record highs today but investors’ mood is far from certain.

US inflation figures for July are due on Friday.