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FTSE Falls, Pound Rises After BOE's Saunders Says Bond-Buying Could End Early

07/15/2021 | 07:21am EDT

Pound Rises After BOE's Saunders Says Bond-Buying Could End Early

The pound rises after Bank of England official Michael Saunders said the central bank could end its bond-buying program early to rein in inflation. Saunders said in a speech on Thursday that it may become appropriate "fairly soon" to withdraw stimulus to return inflation to the 2% target on a sustained basis if economic activity and inflation indicators remain in line with recent trends and downside risks to growth and inflation don't rise significantly. In that case, options would include ending the asset purchase program in the next month or two and/or further policy action next year, he said. GBP/USD rises to 1.3889, from 1.3839 before the speech and EUR/GBP falls to 0.8514, from 0.8560 beforehand.

Companies News: 

Alumasc Group FY 2021 Pretax Profit Expected Above Views as Revenue Grew

Alumasc Group PLC said Thursday that pretax profit for fiscal 2021 will come ahead of its expectations as revenue grew during the period.


ASOS Shares Fall on Demand-Hit Despite Four-Month Revenue Growth -- Update

Shares in ASOS PLC fell on Thursday after the company warned of a hit to market demand related to Covid-19 uncertainty during the last three weeks of the first four months of fiscal 2022, despite also reporting that revenue rose in the period.


Jarvis Securities 1H Profit, Revenue Rose

Jarvis Securities PLC on Thursday posted an increased pretax profit and higher revenue for the first half of the year amid favorable trading conditions and growth in the business.


Nanoco Raises GBP3.2 Mln in Loan Note Subscription

Nanoco Group PLC shares rose Thursday after it said that it has raised 3.2 million pounds ($4.4 million) through a non-dilutive loan note subscription, extending its cash runway.


Serabi Gold Hit Best Quarterly Gold Production in 2Q Since 2019

Serabi Gold PLC said Thursday that its second-quarter gold production was its best quarterly performance since 2019, adding that it remains ahead of its internal production guidance.


Maestrano Group Says FY 2021 Pretax Loss Widened

Maestrano Group PLC said Thursday that its pretax loss widened for fiscal 2021 after booking a 44% rise in expenses, but that revenue rose in the year.


Magnit Changes Structure to Accelerate Online Sales; Deputy CEO Redundant

Magnit said Thursday that it is making several changes to its organizational structure, including making its deputy chief executive officer redundant, in order to accelerate its digital transformation and focus on growing online shopping sales.


Iofina Sees Strong Demand in 1H, Expects Higher 2H Production

Iofina PLC said Thursday that it has had strong demand for its iodine and halogen derivative products in the first half of the year, and expects higher production in the second half.


Salt Lake Potash Appoints Stuart Fraser as CFO

Salt Lake Potash Ltd. said Thursday that it has appointed Stuart Fraser as chief financial officer.


Redcentric Shares Fall After FY 2022 Guidance Is Issued

Shares in Redcentric PLC were trading down on Thursday after the company said customers continued to delay large IT projects due to the coronavirus pandemic, and that it expected a muted revenue and earnings performance in fiscal 2022.


Helical Tenant Enquiries Rise; Collects Majority of 1Q Rent

Helical PLC said Thursday that it has seen a marked increase in enquiries from potential tenants in early fiscal 2022, and that it has collected the majority of its rent due for the June quarter.


Pembridge Resources 2Q Minto Mine Production, Cash Receipts Rose

Pembridge Resources PLC said Thursday that its second-quarter production at the Minto copper-gold mine in Canada rose, together with cash receipts.


Starcom Shares Fall on Continued Pandemic Hit

Shares in Starcom PLC fell Thursday after the company said that it is continuing to experience difficulties due to the coronavirus pandemic and that it expects revenue to fall in the first half.

Market Talk: 

Hays Earnings Set for Upgrades

1047 GMT - Hays's 4Q update was a strong statement, with management signaling a further beat to EBIT consensus for 2021, Davy Research says. The recruitment company now expects EBIT of GBP95 million despite a GBP15 million investment in headcount, up from May's guidance of GBP61.0 million. These are the early stages of the upgrade cycle for the company, and operational leverage may be quicker and more substantial than prior cycles as costs may now be permanently lower, Davy says. "We continue to see strong leverage into 2022 estimates and beyond, while the scope for medium-term special dividends remains considering the strength of the net cash position," the Irish research firm says. Davy increases 2021 EBIT forecasts to GBP91 million from GBP85 million, and 2022 forecasts to GBP175 million from GBP161 million.


UK Gilt Yield Turns Higher As BOE's Saunders Hints at Tightening

1036 GMT - The yield on U.K. benchmark 10-year government bonds turns higher after Bank of England policymaker Michael Saunders signals in a talk about inflation that withdrawing stimulus may be appropriate soon. The 10-year gilt yield jumps around 5 basis points to 0.646% after the speech, according to Tradeweb.


Just Eat Shares Continue to Suffer Despite Orders Growth

0947 GMT - Just Eat continues to enjoy progress in orders growth but shares still suffer from several other negatives, Interactive Investor analyst Keith Bowman says. The food-delivery company reported significant orders growth in the second quarter and raised its first-half guidance, Bowman says. However, intense competition and continued required investment spend remain worrying, he says. "Full clarity on Grubhub and the degree of investment required provides a key investor concern. Just Eat shares are down around 27% since announcing the Grubhub deal back in June 2020 compared to a gain of almost 12% for the wider FTSE 100 index," the analyst says. Meanwhile, worries for slowing growth as Covid-19 restrictions ease also play into the mix, he says.


Pandemic Restrictions Remain a Downside Risk in Europe, But a Growing One

0940 GMT - With coronavirus cases rising rapidly in some European countries as the Delta variant spreads, the threat of the re-introduction of restrictions remains a downside risk for now, albeit a growing one, HSBC says. "Policymakers seem keen to allow the summer holiday season, given the economic and social benefits," Simon Wells, chief European economist at HSBC, says. The downside economic risks posed by the Delta variant are bigger in eurozone countries than in the U.K., given lower vaccination rates among older people, HSBC warns. Even if some restrictions were ultimately reimposed, HSBC would expect them to be less disruptive to economic activity relative to previous restrictions earlier in the year.


UK 'May Do Brexit U-Turn' To Ease Truck-Driver Shortage

0939 GMT - The U.K. could ease immigration rules imposed after the U.K. left the EU to stop a post-Brexit exodus of truck drivers causing food shortages, a parcel website says. The government is considering giving temporary visas to non-U.K. heavy goods-vehicle drivers including EU nationals, Parcelhero says. Thousands of EU drivers and warehouse staff have left the U.K. to avoid new Brexit regulations, fueling a shortfall of about 70,000 HGV drivers, the company says. "The government could be on the brink of a massive Brexit U-turn as the shortage of skilled drivers threatens to cause empty shelves in stores and delayed home deliveries," Parcelhero's David Jinks says. Ministers reportedly plan to relax rules on working hours for drivers and are considering "other measures."


Gilt-Bund Spread Expected to Widen on Diverging Central Bank Action

0908 GMT - The spread between U.K. sovereign bonds and comparable German national debt is likely to widen as their respective central banks face diverging economic backgrounds, says Mizuho. "We expect Gilt-Bund to widen on the back of a diverging backdrop for the respective central banks," analysts at the bank say. Bank of England official Dave Ramsden indicated Wednesday that he puts more weight on the U.K. inflationary scenario, with inflation peaking around 4%, but gave no presumption that inflation will remain high, they say. "We were left with the impression that he and others will still be waiting for the coming Monetary Policy Reports to make more informed assessments," they say. A talk on U.K. inflation by policymaker Michael Saunders scheduled for today is likely have a similar dovish tone, they add.


UK Jobs, Inflation Data Seen as Mildly Positive For Pound

0900 GMT - Solid U.K. employment figures on Thursday and U.K. inflation data on Wednesday were modestly positive for sterling, ING says. That should keep EUR/GBP in the 0.85-0.86 range for the reminder of the week, ING analysts say. EUR/GBP is last up 0.2% to 0.8561. "Based on our short-term financial fair value model, EUR/GBP is trading modestly expensive with our estimate of the short-term fair value at 0.8490," the analysts say. However, the mis-valuation is modest and supports the case for EUR/GBP to hover around 0.85, they say. The number of people on company payrolls in the U.K. rose for the seventh straight month in June, while U.K. inflation accelerated by more than expected in June to 2.5%.

Contact: London NewsPlus, Dow Jones Newswires; +44-20-7842-931

(END) Dow Jones Newswires

07-15-21 0720ET

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