The atmosphere is upbeat on the LSE

Amid soaring inflation, central banks are all announcing aggressive rate hikes, with the Central Bank of Canada even pulling a 1.0% increase just a few days ago. On Thursday, the ECB is almost certain to raise rates by at least 0.25%, and perhaps 0.5%.

In the UK, high inflation is expected to have remained high in June, close to May's level of 9.1%. It is already having an impact on demand, which should in turn impact the labour market.

The race to replace Johnson as the leader of the Conservative Party is accelerating, and the two main candidates should emerge by Thursday.

Last Friday, the FTSE100 gained 1.80%, after Fed governor Christopher Waller backed a 75-bps rate hike in late July, which reassured investors that a 100-bps rate hike might not be the Fed's preferred option. In other good news, this week-end, Chinese officials at the PBOC promised more support for the economy.

The mood remains upbeat today, with the UK's main index up 1.2% this morning. The biggest listing on the London stock markets in ten years, Haleon started trading at 330 pence, giving it a market valuation of around 31 billion pounds.

Food delivery company Deliveroo fell1.9%, after it cut its full-year revenue guidance. Direct Line dropped 12.2%, after the car insurer lowered its earnings guidance for the year.

 

Things to read today:

Half a trillion dollars wiped from once high-flying fintechs (Financial Times)

Oil price rises after Joe Biden fails to secure Saudi output increase (The Guardian)