The tensions in the Gulf have moved up one level as the US reportedly nearly ordered an airstrike against Iran in response to several of its drones being shot down by the Middle Eastern country. The markets this morning are readjusting to the new reality with gold slightly lower after it hit $1,400 for the first time in six years, oil gaining half a percentage point and defence contractor BAE Systems (LON:BAES) rallying 1.45%.
The overall FTSE is higher on a mixture of risers, mainly oil, travel and supermarket chains while pharmaceuticals and luxury brands are adding weight. British Airways' parent International Consolidated Airlines (LON:ICAG) is trading 0.11% lower after BA pilots called for a strike over the latest wage discussions. If it goes ahead the strike would take place during the busiest part of the year hitting thousands of travellers and causing maximum disruption.
Trainline IPO goes swimmingly
In amidst the building tensions train ticketing company Trainline floated in London at 350 pence a share, the top end of its range, and gained another 23% in early trade. At £1.68 billion this is the second largest IPO in London this year with the value of the company high enough to be included in the FTSE 250.
Euro benefits from June growth in Eurozone services
In contrast to the European manufacturing which is now solidly in decline, the Eurozone’s services industry continued to expand at a gentle pace in May helping overall regional economic growth. The Purchasing Managers’ Index for May increased slightly to 52.1 from 51.8 the previous month – with a number over 50 indicating growth and below 50 indicating decline.
The slight growth will be good news for the ECB which signalled at its last meeting that it is getting ready to start more active measures to help revive Europe’s failing economic health. The data boosted the euro against the dollar and the pound, which is in decline this morning against most majors.
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