UK Market Snapshot

UK markets finished in positive territory on Friday, with the FTSE 100 index recording its best daily percentage increase since 30 June, after a disappointing US nonfarm payrolls report for August raised hopes that the US Federal Reserve (Fed) would delay its next rate hike. Go-Ahead Group surged 10.4%, after the company reported upbeat revenue for the year ended 2 July 2016. Pharma stocks, AstraZeneca, GlaxoSmithKline and Hikma Pharmaceuticals gained 2.4%, 3.5% and 5.2%, respectively. Consumer companies, Unilever and Imperial Brands climbed 3.8% and 4.2%, respectively. On the losing side, McCarthy & Stone sank 11.7%, after the housebuilder warned about growth target as housing cancellations advanced post Brexit vote. Carnival declined 4.1%, following a broker downgrade on the stock to the equivalent of a 'Sell'. Segro slid 1.9%, after the company announced that it will sell new shares. The FTSE 100 advanced 2.2%, to close at 6,894.6, while the FTSE 250 rose 0.9%, to settle at 18,016.5.

US Market Snapshot

US markets closed higher on Friday, after the US economy added lower than expected jobs for August, suggesting that the Fed might hold off on raising interest rates in the near term. Cisco Systems, Apple and Boeing rose 0.8%, 0.9% and 1.0%, respectively. Bucking the trend, lululemon athletica plummeted 10.6%, as the company reported downbeat profit for the second quarter and offered a weak guidance for the third quarter. Ambarella tumbled 6.7%, after it reported a decline in its sales and profit for the second quarter. Smith & Wesson Holding plunged 6.4%, despite posting better than expected results for the first quarter. Carnival Corp eased 4.7%, after a leading broker downgraded its rating on the stock to 'Underweight' from 'Equal weight'. The S & P 500 gained 0.4%, to settle at 2,180.0. The DJIA rose 0.4%, to settle at 18,492.0, while the NASDAQ advanced 0.4%, to close at 5,249.9.

Europe Market Snapshot

Other European markets ended in the green on Friday, amid a weaker than expected US jobs report for August. Accor advanced 3.6%, following a broker upgrade on the stock to 'Overweight' from 'Equal weight'. Lenders, Banco Bilbao Vizcaya Argentaria, Societe Generale and Deutsche Bank gained 1.6%, 1.7% and 1.9%, respectively. On the flipside, SBM Offshore plunged 10.6%, after prosecutors rejected its prior leniency agreement with Brazilian authorities regarding a bribery case involving Petroleo Brasileiro. Rocket Internet tumbled 7.0%, as the company reported a wider loss for the first half. adidas lost 1.9%, after the CEO of Callaway Golf, up 1.2%, stated that it will not bid for the golf unit of the German company. The FTSEurofirst 300 index gained 2.1%, to close at 1,378.9. Among other European markets, the German DAX Xetra 30 rose 1.4%, to close at 10,683.8, while the French CAC-40 climbed 2.3%, to settle at 4,542.2.

Asia Market Snapshot

Markets in Asia are trading higher this morning. In Japan, TDK has jumped 7.0%, after a leading brokerage firm increased its target price for the former. The company also announced the establishment of a joint venture with Toshiba, 1.7% up. Mitsui OSK Lines has climbed 6.2%. Retailers, Marui Group and Fast Retailing have advanced 0.5% and 4.9%, respectively. Lenders, Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho Financial Group have gained 1.2%, 1.5% and 2.0%, respectively. In Hong Kong, banking shares, Industrial and Commercial Bank of China and Bank of East Asia have risen 1.1% and 2.9%, respectively. In South Korea, Hanjin Shipping has dropped 4.0%, after it made a Chapter 15 filing with a US court to protect its vessels from being seized by creditors. The Nikkei 225 index is trading 1.3% higher at 17,139.8. The Hang Seng index is trading 1.5% up at 23,608.0, while the Kospi index is trading 0.9% higher at 2,056.2.

Key Corporate Announcements Today

AGMs

Better Capital Pcc Ltd (2009), IG Seismic Services GDR (Reg S), Marwyn Value Investors Limited, Torotrak, Limitless Earth

EGMs

MirLand Development Corporation

Final Dividend Payment Date

BT Group, Panther Securities

Interim Dividend Payment Date

Avon Rubber, St. Modwen Properties

Trading Announcements

International Consolidated Airlines, Monarch Resolutions 1

Key Corporate Announcements for Tomorrow

AGMs

Aster Treasury 4.50% GTD Sec Bds 18/12/43, Bacit Limited, Berkeley Group Holdings (The), Creston, Imagination Technologies Group, ReNeuron Group, Severfield, Smith (DS), Work Group, Mulberry, Oneview Group

Interim Dividend Payment Date

LSL Property Services

Quarterly Ex-Dividend Date

Schlumberger Ltd.

Trading Announcements

Halfords Group, Pennon Group, Berkeley Group, DS Smith, easyJet

Commodity, Currency and Fixed Income Snapshots

Crude Oil

At 0330GMT today, Brent Crude Oil one month futures contract is trading 0.83% or $0.39 lower at $46.44 per barrel. On Friday, the contract climbed 3.04% or $1.38, to settle at $46.83 per barrel, after Russia's President, Vladimir Putin, urged major oil producers to agree to limit output at an upcoming meeting of the OPEC. Meanwhile, Baker Hughes weekly report showed that US oil rigs rose by 1 to 407 rigs in the last week.

Gold

At 0330GMT today, Gold futures contract is trading 0.38% or $5.00 higher at $1328.20 per ounce. On Friday, the contract advanced 0.73% or $9.60, to settle at $1323.20 per ounce, extending its gains from the previous session, after a soft US jobs report for August fuelled expectations that the Fed would refrain from raising interest rates in the coming months.

Currency

At 0330GMT today, the EUR is trading 0.07% higher against the USD at $1.1164, ahead of the Euro-zone and German Markit composite and services PMIs, both for August, slated to release in a few hours. On Friday, the EUR weakened 0.37% versus the USD, to close at $1.1156.

At 0330GMT today, the GBP is trading 0.12% higher against the USD at $1.3310, ahead of UK's services PMI for August, set to release today. Investors will also assess the annual BRC retail sales monitor data in the UK for July, scheduled to release later today. On Friday, the GBP strengthened 0.20% versus the USD, to close at $1.3294, after UK's construction PMI rose more than expected in August.

Fixed Income

In the US, long term treasury prices fell and pushed yields higher, after a dismal US jobs report for August indicated that the Fed might not hike interest rate in the near future. On Friday, yield on 10-year notes rose 3 basis points to 1.60%, while yield on 2-year notes gained 2 basis points to 0.80%. Meanwhile, 30-year bond yield advanced 5 basis points to 2.28%.

Key Economic News

UK construction PMI recorded a rise in August

The construction PMI in the UK advanced to 49.20 in August, compared to a reading of 45.90 in the previous month. Market expectation was for the construction PMI to climb to 46.30.

Euro-zone PPI rose as expected in July

In July, the producer price index (PPI) in the Eurozone, registered a rise of 0.10% on a monthly basis, in line with market expectations. The PPI had advanced by a revised 0.80% in the previous month.

Italian GDP remained steady in 2Q 2016

On a QoQ basis, the final gross domestic product (GDP) remained steady in 2Q 2016, in Italy, compared to a rise of 0.30% in the prior quarter. The preliminary figures had also recorded a flat reading. Markets were anticipating the GDP to remain unchanged.

Number of people unemployed in Spain recorded a rise in August

In Spain, number of people unemployed rose by 14.40 K in August, following a decline of 84.00 K in the prior month. Market anticipation was for number of people unemployed to advance 3.40 K.

Non-farm payrolls in the US advanced in August

In the US, non-farm payrolls climbed by 151.00 K in August, following a revised increase of 275.00 K in the previous month. Markets were anticipating non-farm payrolls to rise 180.00 K.

US average hourly earnings of all employees rose less than expected in August

In August, average hourly earnings of all employees climbed 0.10% in the US on a MoM basis, less than market expectations for a rise of 0.20%. Average hourly earnings of all employees had registered a rise of 0.30% in the prior month.

US non-defence capital goods shipments (ex aircraft) fell in July

On a MoM basis, the final non-defence capital goods shipments (ex aircraft) slid 0.50% in the US, in July. In the previous month, the non-defence capital goods shipments (ex aircraft) had registered a revised similar fall. The preliminary figures had recorded a fall of 0.40%.

US unemployment rate remained steady in August

Unemployment rate remained flat at 4.90% in the US, in August. Markets were anticipating unemployment rate to fall to 4.80%.

US underemployment rate remained unchanged in August

Underemployment rate remained flat at a level of 9.70% in the US, in August.

US New York City current business condition index slid in August

The New York City current business condition index dropped to 47.50 in August, in the US. The New York City current business condition index had recorded a reading of 60.70 in the prior month.

US average weekly hours of all employees fell surprisingly in August

In August, average weekly hours of all employees dropped unexpectedly to a level of 34.30 in the US, compared to market expectations of an advance to a level of 34.50. Average weekly hours of all employees had registered a revised reading of 34.40 in the previous month.

Private payrolls in the US climbed in August

Private payrolls in the US climbed by 126.00 K in August, lower than market expectations of an advance of 180.00 K. Private payrolls had recorded a revised gain of 225.00 K in the prior month.

US average hourly earnings of all employees rose less than expected in August

In August, average hourly earnings of all employees climbed 2.40% in the US on a YoY basis, less than market expectations for a rise of 2.50%. In the previous month, average hourly earnings of all employees had recorded a revised rise of 2.70%.

Manufacturing payrolls in the US recorded a drop in August

In the US, manufacturing payrolls fell by 14.00 K in August, compared to market anticipations of a decline of 3.00 K. Manufacturing payrolls had registered a revised increase of 6.00 K in the prior month.

US durable goods orders (ex transportation) rose less than expected in July

On a MoM basis, the final durable goods orders (ex transportation) in the US registered a rise of 1.30% in July, less than market expectations for a rise of 1.50%. Durable goods orders (ex transportation) had dropped by a revised 0.30% in the previous month. The preliminary figures had recorded a rise of 1.50%.

US trade deficit dropped in July

Trade deficit in the US dropped to $39.50 billion in July, less than market expectations of a trade deficit of $41.40 billion. The US had reported a revised trade deficit of $44.70 billion in the previous month.

US factory orders rose less than expected in July

In July, factory orders advanced 1.90% on a MoM basis in the US, compared to a revised fall of 1.80% in the prior month. Markets were anticipating factory orders to climb 2.00%.

Household employment in the US recorded an increase in August

Household employment registered a rise of 97.00 K in the US, in August. Household employment had recorded a gain of 420.00 K in the previous month.

US durable goods orders rose as expected in July

On a MoM basis, the final durable goods orders recorded a rise of 4.40% in the US, in July, compared to a revised drop of 4.20% in the prior month. Market expectation was for durable goods orders to advance 4.40%. The preliminary figures had also indicated a rise of 4.40%.

US non-defence capital goods orders (ex aircraft) registered a rise in July

On a monthly basis, the final non-defence capital goods orders (ex aircraft) recorded a rise of 1.50% in July, in the US. The non-defence capital goods orders (ex aircraft) had climbed by a revised 0.50% in the previous month. The preliminary figures had recorded a rise of 1.60%.

Canadian international merchandise trade deficit declined in July

Canada has posted the international merchandise trade deficit of C$2.49 billion in July, following a revised international merchandise trade deficit of C$3.97 billion in the previous month. Market anticipation was for the nation to register an international merchandise trade deficit of C$3.30 billion.

Canadian labour productivity fell less than expected in 2Q 2016

On a quarterly basis, labour productivity registered a drop of 0.30% in Canada, in 2Q 2016, lower than market expectations for a drop of 0.40%. Labour productivity had climbed 0.40% in the prior quarter.

Japanese labour cash earnings advanced more than expected in July

In Japan, labour cash earnings registered a rise of 1.40% in July on a YoY basis, more than market expectations for a rise of 0.40%. Labour cash earnings had registered a revised similar rise in the previous month.

Japanese Markit composite PMI slid in August

Compared to a reading of 50.10 in the prior month Markit composite PMI in Japan fell to a level of 49.80 in August.

Japanese consumer confidence index recorded a rise in August

The consumer confidence index in Japan climbed to 42.00 in August, compared to market expectations of a rise to a level of 41.80. In the prior month, the consumer confidence index had registered a reading of 41.30.

Chinese Caixin/Markit services PMI index rose in August

In August, the Caixin/Markit services PMI index in China recorded a rise to 52.10, compared to a reading of 51.70 in the prior month.

Chinese Caixin composite PMI fell in August

Caixin composite PMI in China eased to 51.80 in August. In the prior month, Caixin composite PMI had recorded a level of 51.90.

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