European equity markets are a touch higher on the day as stocks swung around from the disappointing run at the back end of last week. The FTSE 100 is outperforming its continental counterparts as commodity related companies are performing well in early trading.
Chinese manufacturing in July grew at a slower rate, and came in below investors’ expectations, but the fact that it is still expanding assisted mining stocks like Rio Tinto (LON:RIO), BHP Billiton (LON:BLT), Antofagasta (LON:ANTO) and Glencore (LON:GLEN). Firmer commodity prices across copper, oil and Iron ore have also contributed to the high demand for natural resource stocks.
Shares in HSBC (LON:HSBA) are up over 3% this morning after it posted better than expected first-half profits. The bank is well capitalised. The financial institution aims to finish a $2 billion share buyback scheme later this year, and this is helping the stock price this morning.
The EUR/USD is comfortably holding above the $1.17 mark, and seeing as the US revised its first-quarter growth lower, traders aren’t fearful of an interest rate hike from the Federal Reserve in the next few months. At 10am, the eurozone will release the June CPI and unemployment numbers, and traders are expecting 1.3% and 9.2% respectively. The speculation the European Central Bank will discuss the possibility of reducing their stimulus package is still doing the rounds, especially since German inflation remained at 1.5% on Friday, topping analysts’ estimates.
We are anticipating the Dow Jones to open 55 points higher at 21,885, and we are calling the S&P 500 up three at 2475.
At 2.45pm the US will announce the Chicago PMI report for July, and economists are expecting a reading of 61, down from 65.7 in June. Traders will also be keeping an eye out for US pending home sales, and traders are anticipating a 1% increase in June, and that compares with a 0.8% decline in May. The report will be released at 3pm.
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