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Markets Set a High Bar for Sterling to Appreciate on Any BOE Signals

08/03/2022 | 10:02am EDT

Markets Set High Bar For Pound to Gain on BOE Policy Hints

1301 GMT - Markets have set a high bar for sterling to appreciate on any signals by the Bank of England on the expected pace of future interest rate rises at Thursday's meeting, Vantage says. Markets expect the BOE to raise its key rate 50 basis points to 1.75% on Thursday and see another 50bp move in September with rates peaking close to 3% early next year, Vantage analyst Jamie Dutta writes. The BOE is under pressure to abandon its gradual approach to raising rates, he says. "The recent depreciation in the pound over the last few months also reflects a perception by markets that the UK is failing to keep pace and falling behind its central bank peers." (renae.dyer@wsj.com)

Companies News: 
 

Molten Ventures Remuneration Report Resolution Gets Low Votes at AGM

Molten Ventures PLC said Wednesday that the resolution to approve the directors' remuneration report got a significant number of votes against at its annual general meeting, but that all resoluitions passed.

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Redx Pharma Science Chief, Certain Employees to Sell 1.5 Mln Shares

Redx Pharma plc said Wednesday that Chief Scientific Officer Richard Armer and a number of other employees are selling up to 1.5 million ordinary shares in the company at a minimum price of 59 pence each.

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Dye & Durham May Appeal UK Regulator's Decision to Enforce the Sale of TMG

Canadian cloud-based software company Dye & Durham Ltd. said that it is considering appealing a U.K. regulator's decision to force the sale of recently-acquired TM Group (UK) Ltd.

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Scirocco Energy in Default of Prolific Basins Investment Loan After Resolutions Fail

Scirocco Energy PLC said Wednesday that following the failure of two resolutions proposing the removal of certain restrictions on the issue of shares, the company is in default of the Prolific Basins LLC investment loan.

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Canaccord Expands UK, European Footprint with Acquisition of Results International

Canaccord Genuity Group Inc. said Wednesday that it is expanding its global advisory business through the acquisition of U.K.-based Results International Group LLP for an undisclosed sum.

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London Southend Airport Appoints New CEO; Airline Support Campaign Gathers Pace

London Southend Airport said Wednesday that it has appointed John Upton as its new chief executive officer, effective from September, replacing Glyn Jones in the role.

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Vaalco Energy Cuts Guidance After Unsuccessful Well in Gabon

Vaalco Energy Inc. on Wednesday cut guidance due to the performance of the South Tchibala 1HB-ST well offshore Gabon.

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Accsys Technologies Finance Director William Rudge to Step Down by January

Accsys Technologies PLC said Wednesday that Finance Director William Rudge has decided to resign from the company after 12 years of service, to pursue new opportunities.

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Mustang Energy PLC Acquisition of 27.4% in VRFB Holdings Limited

TIDMMUST

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Hill & Smith 1H Revenue, Profit Rose on Pricing Action, Market Resilience

Hill & Smith Holdings PLC said Wednesday that revenue and pretax profit for the first half rose thanks to pricing actions taken to recover input cost inflation and the resilience of its end markets.

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Zinc Media Launches Discounted Share Placing to Buy the Edge Picture

Zinc Media Group PLC said Wednesday that it is launching a share placing and retail offer at a discounted price to raise 5 million pounds ($6.1 million) and acquire the Edge Picture Co.

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EnSilica FY 2022 Revenue Soared, Driven by Strong Order Book

EnSilica PLC said Wednesday that revenue and adjusted Ebitda for fiscal 2022 were ahead of market views, driven by an increasing number of contracts.

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Ariana Resources Says 2022 Kiziltepe Guidance Remains Unchanged

Ariana Resources PLC said Wednesday that 2022 gold production guidance for the Kiziltepe mine in Turkey has been maintained at 25,000 ounces.

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Creo Medical Group 1H Revenue Rose as Number of Endoscopy Technology Users Doubled

Creo Medical Group PLC said Wednesday that it expects to report increased revenue for the first half of 2022 as the company benefited from strong momentum and more users of its endoscopy technology.

 
Market Talk: 

Inflation, Tight Labor Market Argue for 50Bps BOE Interest Rate Rise

1337 GMT - The Bank of England will accelerate the interest rate rise path to a 50 basis point move on Thursday, Nuveen chief investment strategist Brian Nick says in a note. Inflation is accelerating and becoming more broad-based in the U.K. despite recent softening in core goods prices, while inflation expectations have also picked up and the labor market is quite tight, he says. "All of these factors increase the probability that the Bank [of England] will want to get rates up sooner for the same reason the Federal Reserve has been picking up its pace of increases," he says. Recent growth in the labor force, in theory taking some pressure off wages, would argue against the 50bp consensus increase, he says. (emese.bartha@wsj.com)

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Rolls-Royce Set for Higher 1H Revenue

1335 GMT - Rolls-Royce Holdings is forecast to report revenue for 1H on at GBP5.44 billion, up from GBP5.16 billion the same period a year earlier, according to a consensus estimate provided by FactSet. Investors will be looking for signs of a rebound in demand as the airline industry continues to recover from the Covid-19 pandemic, but also for comments on labor issues and wages as inflation bites for the engineering company, which has around 14,000 employees in the U.K. Shares trade up 2.6% at 90.06 pence. Rolls-Royce is due to report 1H results on Thursday. (kyle.morris@dowjones.com)

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Hiscox Looks Well-Placed to Cope With Inflationary Pressures

1308 GMT - Hiscox's cash-reserve buffer looks robust and the specialist insurer is well placed to manage inflationary pressures, Citi's analyst Joshua Mark Hole says in a research note following a investors call. "Included within the actuarial estimate is a $55 million precautionary net inflation load that is said to be over and above the level of claims inflation the company is actually seeing," Hole says. However, the reason behind Wednesday's share-price fall could be the growth outlook, which seems subdued, he says. Shares are down 2.3% at 855.4 pence. (michael.susin@wsj.com)

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BOE Could Stick to Gradual Approach to Raising Rates

1258 GMT - The Bank of England is widely expected to step up the pace of interest rate rises on Thursday but it might act more cautiously as it faces a tough trade-off between inflation and economic growth, Vantage says. "Recent comments by BOE Governor Andrew Bailey have put a 50 basis points hike on the table but given there's not been a lot of recent economic data to signal a bigger move, there is a chance we simply get another quarter point rate hike," Vantage analyst Jamie Dutta writes. That means there's likely to be split vote among policy makers, he says. (renae.dyer@wsj.com)

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Hiscox Takes 1H Investment-Return Hit

1208 GMT - Hiscox drops 2% after the Lloyd's of London insurer reported a swing to a 1H pretax loss, though gross premiums written rose. The pretax loss was 17% worse than expected owing to lower investment returns, mainly from unrealized losses, RBC Capital Markets says. Underwriting performance broadly matched expectations, though growth in the firm's U.S. direct and partnerships division will remain weaker this year and the interim dividend of $0.12 slightly missed consensus expectations of $0.14, RBC says. "At first glance, we think the update is largely in line with our expectations and consistent with the 1Q update," RBC analyst Derald Goh says in a note. "The growth outlook in U.S. DPD might warrant further explanation, given high expectations," he says. (philip.waller@wsj.com)

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Pound Pares Gains Vs Dollar, Turns Lower Vs Euro After UK PMI Data

1120 GMT - Sterling pares its gains against the dollar and turns weaker versus the euro after July's U.K. services purchasing managers' index was unexpectedly revised lower. The final reading for July's services PMI was 52.6, down from a preliminary estimate of 53.3 and compared with 54.3 in June, according to S&P Global/CIPS. It marked the slowest growth in services activity in 17 months. "While the data may result in some intraday weakness in sterling, GBP/USD is likely to remain range-bound as market focus looks towards tomorrow's Bank of England meeting and the highly anticipated interest rate announcement," Silicon Valley Bank's Sam Cooper says. GBP/USD falls to 1.2175 after the data from 1.2200 beforehand. EUR/GBP rises to 0.8370 from 0.8351. (renae.dyer@wsj.com)

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Expected UK Rate Hike Would Hit First-Time House Buyers Hard

1100 GMT - With the Bank of England expected to raise rates by a further 0.5% on Thursday, new first-time buyers would see mortgage payments increase to an average of 40% of their gross salary, a level not seen since 2012, Rightmove calculates. Should the U.K.'s central bank hike rates by 0.5% as expected--the largest interest rates increase since 1995--the average monthly mortgage rate would increase to exceed GBP1,000, the online property portal says. "A new record first-time buyer asking price of GBP224,943 means that a 10% deposit for a first-time buyer type home is now 57% higher than it was ten years ago, while average salaries have only increased by 31%," Tim Bannister, Rightmove's property data expert says in a note. (joseph.hoppe@wsj.com)

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Taylor Wimpey's Slowing Sales Rate Isn't a Problem

(MORE TO FOLLOW) Dow Jones Newswires

08-03-22 1001ET

Stocks mentioned in the article
ChangeLast1st jan.
ACCSYS TECHNOLOGIES PLC 4.55% 69 Delayed Quote.-63.08%
ARIANA RESOURCES PLC -2.69% 2.53 Delayed Quote.-35.71%
AUSTRALIAN DOLLAR / BRITISH POUND (AUD/GBP) 0.10% 0.60538 Delayed Quote.12.16%
AUSTRALIAN DOLLAR / EURO (AUD/EUR) -0.20% 0.67263 Delayed Quote.5.51%
BRITISH POUND / EURO (GBP/EUR) -0.23% 1.11096 Delayed Quote.-5.95%
BRITISH POUND / US DOLLAR (GBP/USD) -0.22% 1.0762 Delayed Quote.-19.80%
CANACCORD GENUITY GROUP INC. -1.43% 6.91 Delayed Quote.-54.18%
CANADIAN DOLLAR / BRITISH POUND (CAD/GBP) 0.01% 0.682971 Delayed Quote.15.94%
CANADIAN DOLLAR / EURO (CAD/EUR) -0.11% 0.758961 Delayed Quote.9.05%
CANADIAN DOLLAR / US DOLLAR (CAD/USD) -0.10% 0.73498 Delayed Quote.-7.03%
CREO MEDICAL LIMITED -0.98% 60.895 Delayed Quote.-58.72%
EURO / BRITISH POUND (EUR/GBP) 0.22% 0.89988 Delayed Quote.6.25%
EURO / US DOLLAR (EUR/USD) 0.01% 0.96853 Delayed Quote.-14.81%
INDIAN RUPEE / BRITISH POUND (INR/GBP) 0.40% 0.011403 Delayed Quote.14.34%
INDIAN RUPEE / EURO (INR/EUR) -0.26% 0.012657 Delayed Quote.7.66%
INDIAN RUPEE / US DOLLAR (INR/USD) -0.37% 0.012262 Delayed Quote.-8.35%
MOLTEN VENTURES PLC -1.82% 308.28 Delayed Quote.-69.16%
NEW ZEALAND DOLLAR / US DOLLAR (NZD/USD) -0.11% 0.57329 Delayed Quote.-15.97%
REDX PHARMA PLC -2.56% 57 Delayed Quote.-31.98%
RIGHTMOVE PLC -2.13% 559.8 Delayed Quote.-28.05%
SCIROCCO ENERGY PLC 4.00% 0.26 Delayed Quote.-65.52%
US DOLLAR / BRITISH POUND (USD/GBP) 0.14% 0.929092 Delayed Quote.24.69%
US DOLLAR / EURO (USD/EUR) 0.00% 1.032439 Delayed Quote.17.33%
US DOLLAR / TURKISH LIRA (USD/TRY) 0.14% 18.4514 Delayed Quote.38.28%
VAALCO ENERGY, INC. -10.43% 4.12 Delayed Quote.28.35%
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