Sterling Seen Falling Below $1.30 on Fed-BOE Divergence

Sterling could fall below the key 1.30 level versus the dollar in the near-term as the Bank of England is expected to raise interest rates by less than the Federal Reserve, MUFG Bank says. "While Fed Chair Jerome Powell and other Fed officials have been talking up the potential need for larger 50 basis points rate hikes at upcoming FOMC meetings, the BOE is continuing to signal more caution over the need for further monetary tightening in the near-term," MUFG analysts say. This divergence in rhetoric has been reflected in market pricing with the BOE expected to deliver a cumulative total of 136bp rate rises by year-end, compared to 212bp for the Fed, they say. 


 
Companies News:

Polymetal Weighs Restructuring to Spin off Russian Businesses, Shares Rise

Polymetal International PLC shares rose Tuesday after it said it was mulling several options to increase shareholder value, following media reports that it was preparing to sell off its Russian businesses.

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SSE Raises FY22 Guidance as Renewable Power Output Recovered in 4Q

SSE PLC on Tuesday raised earnings guidance for fiscal 2022, as renewable electricity production benefited from better weather conditions in the fourth quarter.

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Croda's Performance in First Three Months of 2022 Robust; Boosts Growth in Consumer Care

Croda International PLC said Tuesday that its performance in the first three months of the year has been robust, and that it was targeting sales in its consumer-care division of 1 billion pounds ($1.31 billion) by 2025.

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Ten Entertainment Swung to 2021 Pretax Profit; To Resume Dividend in 2022

Ten Entertainment Group PLC on Tuesday reported a swing to profit in fiscal 2021, underpinned by robust sales growth, and said it expects to deliver a performance ahead of market expectations in 2022 and to resume the dividend payout.

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AG Barr FY 2022 Profit Beat Pre-Pandemic Level as Sales Grew

A.G. Barr PLC on Tuesday reported higher profits for the year ended Jan. 30, reflecting strong sales growth.

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Bellway 1H Profit, Revenue Rose; Sees FY 2022 Sales Rising On-Year

Bellway PLC said Tuesday that its pretax profit rose in the first half of fiscal 2022, and it expects a strong performance for the full year.

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S&U FY 2022 Pretax Profit Rose, Raises Dividend

S&U PLC said on Tuesday that pretax profit for fiscal 2022 rose on lower used car costs, and raised its dividend payout.

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McKay Securities Gets Offer Approach From Slate Asset Management

McKay Securities PLC said Tuesday that it has received a request from Slate Asset Management L.P. for due diligence access so that it can consider a possible all-cash offer for the U.K. real-estate investment trust.

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Xaar Swung to 2021 Pretax Profit, Confident in Outlook

Xaar PLC said Tuesday that it swung to a pretax profit in 2021 as its gross margin improved, and said its outlook for 2022 was confident with a strong order book across the business.

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Mulberry Group Anticipates FY 2022 Revenue, Profit Above Expecations on Strong Sales

Mulberry Group PLC said Tuesday that it anticipates reporting revenue and profit moderately above expectations for fiscal 2022 after booking robust sales.

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TinyBuild 2021 Revenue, Pretax Profit Rose After Strong Performance of New Games

TinyBuild Inc. said Tuesday that revenue and pretax profit for 2021 rose after a strong performance in the latter part of the year from new games titles and back-catalogue sales.

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FireAngel 2021 Loss Narrowed, Forecasts Improvement for 2022

FireAngel Safety Technology Group PLC on Tuesday reported a narrowed loss for 2021 and forecast better margins and earnings for 2022.

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Personal Group Holdings 2021 Pretax Profit Fell; Reduces Dividend

Personal Group Holdings PLC posted on Tuesday a reduced pretax profit for 2021 after booking higher expenses due the increased contribution from its benefits divisions, and reduced its dividend payout. 


 
Market Talk:

Bellway Shares Look Cheap on Optimistic Outlook

1013 GMT - Bellway's first-half performance ticks all the right boxes and the company is positioned for strong growth, though its share price has been driven down by bearish investors, Interactive Investor says. The house builder's prospects, like its peers, have been clouded by cost inflation, rising interest rates and supply-chain constraints, and its share price declined 25% in the last year compared to a 1.7% dip in the wider FTSE 250, the investment platform says. "Even so, and with some of the larger players in the industry, the general view of the company's prospects is optimistic, with the market consensus of the shares continuing to come in at a strong buy," Interactive Investor says. Shares are down 3.5% at 2,510.0 pence.

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Barclays Faces Reputation Issues From Bond Blunder

1006 GMT - Barclays faces reputation issues following a bond blunder, says Hargreaves Lansdown. The British bank said it issued more securities than it had registered for sale in the U.S., meaning it will have to repurchase the affected bonds at their original price, taking a loss of GBP450 million. "This is a highly embarrassing turn of events for Barclays," HL says, adding that stock investors are clearly irked about the mismanagement of the structured product sales and the quick fire purchase, which sees the bank nursing a heavy loss. The blunder has also delayed the bumper GBP1 billion share buy back, adding toshareholders' angst, HL says. Still, underlying performance of the business is positive, and the bank is well capitalised, with a CET1 radio higher than the regulatory minimum, it adds. Barclays' shares fall 3.3%.

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Bellway's 1H Suggests UK Housing Market Is Faltering

0947 GMT - Bellway's first-half results hint at a U.K. housing market coming off the boil, eToro says. While the FTSE 250-listed house-builder's sales rose nearly 35% between July 2020 and 2021, it is predicting an increase of just 10% in the year to July 2022, the financial-services firm says. "While strong, that's a significant slowdown," eToro says, adding that the company's full-year average selling price is expected to fall versus a year earlier. "Those figures suggest the housing frenzy that has gripped the market over the past 12 months or so is beginning to calm. Demand will remain strong in 2022, but we believe it will weaken somewhat in the face of higher inflation and rising interest rates."

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Mission Group's Future Financial Performance Seen as Attractive

0947 GMT - Mission Group's strong set of 2021 results showed a positive performance as well as operational and strategic momentum, Shore Capital says. Notwithstanding current uncertainty stemming from the war in Ukraine, analysts expect the marketing company's financial performance to be attractive and driven by a positive advertising spend backdrop as well as self-help initiatives, a deep digital skill set, a loyal blue-chip client base and a commitment to adding new creative, data and analytics capabilities. "We see potential for a substantial share price rerating particularly after a period of weakness," the U.K. investment group says. Shore Capital has Mission Group as a house stock. Shares are up 12% at 61 pence.

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Flatter UK Yield Curve Reflects Growth Worries

0935 GMT - The U.K. yield curve has flattened, suggesting investors are concerned about economic growth, says Rabobank. "The fact that the gilt curve flattened despite this pricing out of rate hikes is noteworthy, as it points to the market focusing upon the scale of the headwinds facing the U.K. economy rather than the modest reduction in rate hike expectations," Rabobank analysts say. A more cautious tone from the Bank of England at its March 17 meeting, due to a looming squeeze on real household incomes, led investors to unwind bets that interest rates could rise more aggressively, even by 50 basis points, in coming meetings.

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Gilt Yields Fall Across The Curve Since BOE Meeting

0926 GMT - U.K. borrowing costs have been falling across all maturities since the Bank of England relaxed its stance on the outlook of interest-rate rises at its March meeting, says Rabobank. On Monday, "gilt yields finished lower across the curve, with the 2-year down by 5.4bp, the 10-year by 7.8bp and the 30-year by 10.5bp," analysts at the Dutch bank say. The move was triggered by "a dovish turn from the Bank of England Governor Bailey who noted that the Bank had softened its guidance at its 17th March meeting owing to a looming squeeze on real household incomes that is set to exceed that seen in the 1970s." U.K. 10-year gilt yields last trade at 1.69% and two-year yields at 1.39%, according to FactSet.


Contact: London NewsPlus, Dow Jones Newswires; Write to Sarka Halas at sarka.halas@wsj.com

(END) Dow Jones Newswires

03-29-22 0637ET