Morning Brief – London Returns

Stocks in London are set to open higher on Tuesday, as financial markets in London return to action following a Bank holiday for the state funeral of Queen Elizabeth II.

Sterling is also notably higher than yesterday after reaching its lowest trading level in nearly forty years as it crashed towards the 1.1350 benchmark level.

In Tuesday’s United Kingdom earning calendar, there are full-year results from Sports Direct owners Frasers, and also as half year results from healthcare firm Haleon, and retailer Kingfisher.

Earlier today we say the release of German August producer prices, which resulted in a massive beat on estimated. In fact, it was the highest monthly price jump on record.

The monthly figure came in at +7.9%. vs +1.6% m/m expected. Producer prices came in at +45.8% vs +37.1% y/y expected. Once again, the increase in energy prices was the main contributor.

Prices also rose significantly for intermediate goods (+17.5%) and capital goods (+7.8%) as well as for durable and non-durable consumer goods (10.9% and 16.9%, respectively).

In Japan on Tuesday, the Nikkei 225 index was up by nearly 0.5%, Tokyo also having been closed for holiday on Monday. Japan’s core consumer price index hit 2.8% in August, the highest level since 2014, government data showed, as soaring energy prices bite.

In China, the Shanghai Composite was up 0.1%, while the Hang Seng index in Hong Kong was up 1.1% on the latest People’s Bank of China rate decision.

China’s central bank left its benchmark lending rate unchanged, in line with market expectations. The People’s Bank of China held its one-year loan prime rate – which serves as a benchmark for corporate loans – at 3.65%, while the five-year rate remained at 4.3%.

The release of the RBA meeting minutes showed that Australia’s central bank expects to implement more interest rate hikes but sees the case for a slower pace of increase as it seeks to keep the economy on “an even keel” while fighting inflation, minutes from its latest meeting showed.

The Reserve Bank of Australia has increased the cash rate target earlier in September by half a percentage point to stand at 2.35% from 1.85% previously.