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| Markets cautious ahead of key week for central banks – business live | Markets cautious ahead of key week for central banks – business live |
| (35 minutes later) | |
| 8.47am BST | |
| 08:47 | |
| Here’s Danske Bank on the forthcoming Jackson Hole meeting of central bankers: | |
| ECB president Mario Draghi is set to be among the speakers for the first time in three years. In 2014, he hinted at QE and now the focus is on tapering signals. We expect him to deliver a dovish message and to not give any new communication on the issue of tapering of asset purchases. | |
| When it comes to the Fed, we do not expect anything dramatic. We look for a repeat of signals that the announcement on balance sheet reduction will come relatively soon (likely September) and that one more rate hike is still the base case this year – as signalled by vice president Bill Dudley last week. | |
| Updated | |
| at 9.05am BST | |
| 8.34am BST | 8.34am BST |
| 08:34 | 08:34 |
| It is a key year for oil and gas companies, according to analysts at Barclays: | It is a key year for oil and gas companies, according to analysts at Barclays: |
| We see the next 12 months as a critical period for the oil and gas industry and one that should see companies getting back to covering dividends and reducing debt organically. As such, over the coming year, we see competitive performance as a crucial determinant of value creation and this report is our annual assessment of the operational and financial performance of the integrated companies over a 25-year history. It allows us to align companies to differing quartiles of performance and assess whether they are appropriately valued. We conclude that there is still material value in the large cap oils, with our preference towards those stocks with lower break-evens and more potential to re-rate over the next 12 months. Our key overweight stocks are BP, Conoco, Exxon, OMV and Shell. | We see the next 12 months as a critical period for the oil and gas industry and one that should see companies getting back to covering dividends and reducing debt organically. As such, over the coming year, we see competitive performance as a crucial determinant of value creation and this report is our annual assessment of the operational and financial performance of the integrated companies over a 25-year history. It allows us to align companies to differing quartiles of performance and assess whether they are appropriately valued. We conclude that there is still material value in the large cap oils, with our preference towards those stocks with lower break-evens and more potential to re-rate over the next 12 months. Our key overweight stocks are BP, Conoco, Exxon, OMV and Shell. |
| 8.31am BST | 8.31am BST |
| 08:31 | 08:31 |
| News of a major oil deal has helped to limit some of the market falls. | |
| The Danish shipping company Moller-Maersk has announced it will sell its oil and gas division, Maersk Oil, to France’s Total for $7.45bn. It plans to return a large part of the proceeds to shareholders, which has helped to push its shares up around 5%. | |
| Updated | |
| at 9.06am BST | |
| 8.20am BST | 8.20am BST |
| 08:20 | 08:20 |
| European markets open lower | European markets open lower |
| As expected, investors appear to be keeping their powder dry at the start of the new trading week. | As expected, investors appear to be keeping their powder dry at the start of the new trading week. |
| In keeping with the gloomy weather in London at the moment, the FTSE 100 has dipped 0.1%, with banks among the biggest fallers. But mining shares are moving higher, with BHP Billiton leading the way ahead of its results on Tuesday. | In keeping with the gloomy weather in London at the moment, the FTSE 100 has dipped 0.1%, with banks among the biggest fallers. But mining shares are moving higher, with BHP Billiton leading the way ahead of its results on Tuesday. |
| Elsewhere, Germany’s Dax, France’s Cac and Spain’s Ibex all opened 0.5% lower, while Italy’s FTSE MIB fell 0.27%. | |
| Updated | |
| at 9.07am BST | |
| 8.04am BST | 8.04am BST |
| 08:04 | 08:04 |
| Dollar calmer but respite could be brief | Dollar calmer but respite could be brief |
| The dollar has been under pressure recently, not least because of the car-crash that is US politics at the moment. It seems a bit calmer this morning, edging away from four month lows against the yen. But Viraj Patel, foreign exchange strategist at ING Bank, believes that any respite for the US currency could be short-lived: | |
| There is little love lost for the dollar right now, with the currency fast becoming a sell on the current White House drama. It is a bit strange to see both speculative and actual personnel changes within the White House causing such a stir for global markets, though we may be able to put this down to summer markets. Still, we prefer to focus on the broader economic implications of US politics and what this means for the dollar. | There is little love lost for the dollar right now, with the currency fast becoming a sell on the current White House drama. It is a bit strange to see both speculative and actual personnel changes within the White House causing such a stir for global markets, though we may be able to put this down to summer markets. Still, we prefer to focus on the broader economic implications of US politics and what this means for the dollar. |
| In addition to diminishing odds of any pro-growth policies from the Trump administration, we believe the narrative is shifting towards political uncertainty having a dampening effect on business confidence and investment activity. Given that US political environment remains frenetic, the risk relief rally seen late on Friday may prove to be short-lived and this could well keep the dollar pinned down over the coming weeks. | In addition to diminishing odds of any pro-growth policies from the Trump administration, we believe the narrative is shifting towards political uncertainty having a dampening effect on business confidence and investment activity. Given that US political environment remains frenetic, the risk relief rally seen late on Friday may prove to be short-lived and this could well keep the dollar pinned down over the coming weeks. |
| The pound meanwhile is edging lower against the dollar as the US currency stabilises for the moment. With the continuing uncertainty over Brexit terms, sterling is down 0.16% at $1.2850. Against the euro it is virtually unchanged at €1.0946. | The pound meanwhile is edging lower against the dollar as the US currency stabilises for the moment. With the continuing uncertainty over Brexit terms, sterling is down 0.16% at $1.2850. Against the euro it is virtually unchanged at €1.0946. |
| Updated | |
| at 9.07am BST | |
| 7.55am BST | 7.55am BST |
| 07:55 | 07:55 |
| Oil is slipping back on worries that increasing US production could outweigh attempts by Opec to curb output and support crude prices. | Oil is slipping back on worries that increasing US production could outweigh attempts by Opec to curb output and support crude prices. |
| Brent is currently down 0.19% at $52.62 a barrel while West Texas Intermediate, the US benchmark, is 0.1% lower at $48.46. Traders will be keeping an eye on an Opec technical meeting today. Ipek Ozkardeskaya, senior market analyst at London Capital Group, said: | Brent is currently down 0.19% at $52.62 a barrel while West Texas Intermediate, the US benchmark, is 0.1% lower at $48.46. Traders will be keeping an eye on an Opec technical meeting today. Ipek Ozkardeskaya, senior market analyst at London Capital Group, said: |
| [At the meeting] nations are expected to ensure compliance with output cuts to prevent prices from diving again. Satisfactory comments could encourage a further recovery in oil prices. | [At the meeting] nations are expected to ensure compliance with output cuts to prevent prices from diving again. Satisfactory comments could encourage a further recovery in oil prices. |
| Updated | Updated |
| at 8.06am BST | at 8.06am BST |
| 7.44am BST | 7.44am BST |
| 07:44 | 07:44 |
| In Asia the Nikkei 225 is down around 0.4%, and European markets are forecast to open lower: | In Asia the Nikkei 225 is down around 0.4%, and European markets are forecast to open lower: |
| Our European opening calls:$FTSE 7300 down 24$DAX 12154 down 11$CAC 5104 down 10$IBEX 10365 down 20$MIB 21762 down 53 | Our European opening calls:$FTSE 7300 down 24$DAX 12154 down 11$CAC 5104 down 10$IBEX 10365 down 20$MIB 21762 down 53 |
| 7.42am BST | 7.42am BST |
| 07:42 | 07:42 |
| Agenda: Investors nervous as financial and political concerns continue | Agenda: Investors nervous as financial and political concerns continue |
| Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. | Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. |
| Stock markets are in a cautious mood amid continuing political tensions and ahead of a big week for central bankers. | Stock markets are in a cautious mood amid continuing political tensions and ahead of a big week for central bankers. |
| Worries about North Korea were put on the backburner last week amid the continuing turmoil at the White House and the terrorist attacks in Spain. But they could be back in focus with the US and South Korea holding military exercises this week. Craig Erlam, senior market analyst at Oanda, said: | Worries about North Korea were put on the backburner last week amid the continuing turmoil at the White House and the terrorist attacks in Spain. But they could be back in focus with the US and South Korea holding military exercises this week. Craig Erlam, senior market analyst at Oanda, said: |
| Europe is set for a slightly negative start on Monday, threatening to extend its losing streak to three sessions as political and geopolitical risk continue to weigh on risk appetite. | Europe is set for a slightly negative start on Monday, threatening to extend its losing streak to three sessions as political and geopolitical risk continue to weigh on risk appetite. |
| Geopolitical risk could rear its ugly head again this week as the US and South Korea begin planned military exercises on Monday, just as tensions between the North and these two countries appear to have calmed. Should North Korea respond in kind, then we could see a repeat of the safe haven rush from a couple of weeks ago when the situation previously flared up between the countries. | Geopolitical risk could rear its ugly head again this week as the US and South Korea begin planned military exercises on Monday, just as tensions between the North and these two countries appear to have calmed. Should North Korea respond in kind, then we could see a repeat of the safe haven rush from a couple of weeks ago when the situation previously flared up between the countries. |
| US markets closed lower for the second week in succession as President Trump faced criticism for his response to the events in Charlottesville. But news that his adviser Steve Bannon was leaving his role at the White House gave a late lift to Wall Street on Friday. Michael Hewson, chief market analyst at CMC Markets UK, said: | US markets closed lower for the second week in succession as President Trump faced criticism for his response to the events in Charlottesville. But news that his adviser Steve Bannon was leaving his role at the White House gave a late lift to Wall Street on Friday. Michael Hewson, chief market analyst at CMC Markets UK, said: |
| We did see a late rebound off the lows late on Friday when it was announced that Steve Bannon, one of President Trump’s closest advisers, had left the administration. It was well known that there was tension amongst him and some other members of the president’s top team, including chief economic adviser Gary Cohn. | We did see a late rebound off the lows late on Friday when it was announced that Steve Bannon, one of President Trump’s closest advisers, had left the administration. It was well known that there was tension amongst him and some other members of the president’s top team, including chief economic adviser Gary Cohn. |
| There had been some uncertainty surrounding the future of Cohn, in the wake of recent events in Charlottesville, and the president’s failure unequivocally to condemn the violence of the far right, particularly given Cohn’s own Jewish ancestry. | There had been some uncertainty surrounding the future of Cohn, in the wake of recent events in Charlottesville, and the president’s failure unequivocally to condemn the violence of the far right, particularly given Cohn’s own Jewish ancestry. |
| The departure of Cohn would have been a hammer blow to the president, on top of all the other recent resignations, which suggests there may well have been a hint of political calculation behind Friday’s events. | The departure of Cohn would have been a hammer blow to the president, on top of all the other recent resignations, which suggests there may well have been a hint of political calculation behind Friday’s events. |
| Bannon’s departure buys Trump time when he is starting to look isolated and even a little beleaguered. The big question is how we move on from here and whether the president still has the authority to move forward on any key policy areas, such as tax reform. | Bannon’s departure buys Trump time when he is starting to look isolated and even a little beleaguered. The big question is how we move on from here and whether the president still has the authority to move forward on any key policy areas, such as tax reform. |
| There are indeed reports that Trump may now try and push through the long-promised tax reforms in an attempt to at least get some of his policies on the books. | There are indeed reports that Trump may now try and push through the long-promised tax reforms in an attempt to at least get some of his policies on the books. |
| On the economic front, there is little to look forward to today. Most of the big news comes later in the week, not least with the Jackson Hole summit of central bankers in the US. Investors will be looking for any signs of further interest rate moves from the Fed, and any hints from the European Central Bank about a slow withdrawal of its bond buying programme. However, there have already been suggestions that the ECB president Mario Draghi is unlikely to say anything too informative. CMC’s Hewson said: | On the economic front, there is little to look forward to today. Most of the big news comes later in the week, not least with the Jackson Hole summit of central bankers in the US. Investors will be looking for any signs of further interest rate moves from the Fed, and any hints from the European Central Bank about a slow withdrawal of its bond buying programme. However, there have already been suggestions that the ECB president Mario Draghi is unlikely to say anything too informative. CMC’s Hewson said: |
| The scope for surprises was diminished somewhat by ECB sources at the end of last week when it was reported the ECB president Mario Draghi would not be making any comment on monetary policy when he speaks later this week. | The scope for surprises was diminished somewhat by ECB sources at the end of last week when it was reported the ECB president Mario Draghi would not be making any comment on monetary policy when he speaks later this week. |
| This reticence to comment may also have something to do with the fact that there appears to some concern on the governing council about an overshoot to the upside for the euro, particularly given the recent weakness of the US dollar. | This reticence to comment may also have something to do with the fact that there appears to some concern on the governing council about an overshoot to the upside for the euro, particularly given the recent weakness of the US dollar. |
| Here is our preview of the Jackson Hole event: | Here is our preview of the Jackson Hole event: |
| Also on the agenda later in the week are French and German PPI numbers and the latest second quarter GDP figures from the UK. | Also on the agenda later in the week are French and German PPI numbers and the latest second quarter GDP figures from the UK. |
| Updated | Updated |
| at 8.05am BST | at 8.05am BST |