Investment market update
UK equities are expected to open slightly lower this morning following declines on Wall Street and Asia overnight.
Asian stocks headed for a third weekly loss and bond risk rose amid concern a US payrolls report will reinforce prospects that the Federal Reserve will raise interest rates.
US stocks declined for the fourth time in five sessions, as a parade of media companies reported disappointing results. Viacom and Fox fell more than 6% for the day.
UK stocks were little changed, paring an earlier retreat after fewer Bank of England policy makers than expected voted to increase interest rates this month. Declines in miners and oil companies weighed on the benchmark, as BHP Billiton Ltd and Glencore Plc fell around 2%.
The Bank of England governor’s revamped communication regime that went live yesterday produced in two hours what officials used to take two weeks to publish. That previous slow reveal of policy reports sometimes created volatility, as happened in August 2014, when their forecasts and meeting minutes published a week apart sent markets in opposite directions.
Japan’s central bank, the Bank of Japan (BOJ), has decided not to expand its monetary stimulus as it continues to see the country’s economy expanding at a moderate pace. The BOJ, in a statement released this morning, said that the country’s CPI is likely to be about 0% currently due to the effects of the fall in energy prices. The BOJ earlier cut its economic growth forecast to 1.7% from 2%.
German industrial production unexpectedly decreased in June, highlighting the risks for Europe’s largest economy from weaker growth in emerging market countries such as China. Output, adjusted for seasonal swings and inflation, fell 1.4% after rising a revised 0.2% in May, data from the Economy Ministry in Berlin showed on Friday.
The fall in Greek equities that’s erased $12 billion in market value this week is stirring up little concern among European investors. The nation’s equities have declined 16% since the Athens Stock Exchange reopened on Monday, with banks hovering near record lows. In contrast, the Stoxx Europe 600 Index rose 1.1%, buoyed by what JPMorgan Chase Co. said is the best earnings season in at least six years.