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Investment Market Update

Early trading

UK stocks are set for a quiet start, with little direction set by Asia overnight and a meeting of central bankers later this week likely to set the tone for world equity markets.

Asia – Asian stocks fell with crude futures as investors weighed the prospects for higher rates in the US, while shares in Japan climbed on speculation for further stimulus.

US – US stocks closed lower amid uncertainty over when the Federal Reserve will next move interest rates. Minutes from the most recent gathering of the Fed’s rate-setting committee revealed a split, with two members favouring a rate rise when it next meets in September.

UK – UK stocks fell, but shares in Easyjet rose 2% on speculation that the airline could be a takeover target. Easyjet was the biggest riser on the index, with traders citing reports that it could be a target for US leasing company AerCap.

Headlines

  • The Federal Reserve is close to hitting its targets for US employment and 2% inflation, according to the central bank’s vice chairman, Stanley Fischer. In a speech in Colorado, the Fed’s number two policymaker was upbeat about the economy’s recovery and prospects. “We are close to our targets,” he said on Sunday, adding that jobs growth had been “remarkably resilient”.
  • Voting gets under way this week in the contest to be leader of the UK’s main opposition Labour Party, with incumbent Jeremy Corbyn the clear favorite to keep his job even though he’s lost the backing of most Labour members of Parliament.

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