Stock markets barely moved early on Wednesday, with little major corporate news and the release of euro zone inflation figures expected as the next boost for trade.
The key economic indicator from the European Central Bank is expected at 1000 BST. The consensus, according to FXStreet, expects the bloc’s annual inflation rate to hit 9% in August from 8.9% in July.
‘Will the ECB rise 50 or 75 bps in September? August inflation data from the Eurozone is likely to have a major effect on this decision. Should inflation surprise on the upside again, ECB hawks favoring a 75bp step should at least enter next week’s rate meeting with strong tailwinds,” Commerzbank said.
The ECB raised its key rate by half a percentage point – 50 basis points – in July, saying a “bigger” first step towards policy normalization was needed in the face of soaring inflation. The next ECB rate decision will be on Thursday next week.
The FTSE 100 index fell 5.71 points, or 0.1%, to 7,355.92 early Wednesday. The mid-cap FTSE 250 index fell 14.19 points, or 0.1%, to 19,135.46. The AIM All-Share Index rose 0.57 points, or 0.1%, to 887.88.
The Cboe UK 100 index was flat at 734.99. The Cboe 250 fell 0.1% to 16,429.13 and the Cboe Small Companies was flat at 13,931.32.
In continental Europe, the CAC 40 in Paris was up 0.2%, while the DAX 40 in Frankfurt was up 0.4% early Wednesday.
Commzerbank added that the immediate outlook for the eurozone “remains a fundamental minefield.”
Russia’s Gazprom on Wednesday cut gas supplies to Germany via the Nord Stream 1 gas pipeline for maintenance work, further increasing tensions in an already tight electricity market.
The three-day work at a compressor station is “necessary”, Gazprom said, adding that it should be carried out “every 1,000 hours of operation”.
But the head of Germany’s Federal Network Agency, Klaus Mueller, called the move ‘technically incomprehensible’, warning it was likely just a pretext for Moscow to brandish energy supplies as a threat .
The euro was trading at $1.0016 on Wednesday morning, down from $1.0022 on Tuesday night.
The pound was listed at $1.1667, slightly higher than $1.1662 at the close of London shares on Tuesday. Against the yen, the dollar eased to 138.49 JP¥ from 138.75 JP¥.
In Asia on Wednesday, the Japanese Nikkei 225 index closed down 0.4%. In China, the Shanghai Composite index closed down 0.8%, while the Hang Seng index in Hong Kong rose 0.1% in late trading. The S&P/ASX 200 in Sydney ended down 0.2%.
On Wednesday morning, official data showed Chinese factory activity fell in August for the second month in a row. However, the contraction was not as severe as feared.
The Purchasing Managers’ Index, a key gauge of manufacturing in the world’s second-largest economy, came in at 49.4 points, down from 49.0 in July, but still below the 50-point mark separating growth from contraction, according to data from the National Bureau of Statistics. The figure beat the consensus forecast, according to FXStreet, of 49.2.
China’s non-manufacturing PMI came in at 52.6 points in August, down from 53.8 in July, according to BES data, but again topped the consensus, which had stood at 52. ,2.
In London, Anglo American topped the FTSE 100, up 1.6% after saying De Beers’ seventh round of rough diamond sales in 2022 amounted to $630 million, down slightly from to $638 million in the sixth round, but up from $522 million in the seventh. cycle of 2021.
“De Beers Group rough diamond sales continued at a stable level during the seventh sales cycle of 2022. In line with normal seasonal trends, we expect sales in future cycles to be affected by the temporary closure of factories in polishing for diwali holiday. ‘ said general manager Bruce Cleaver.
Diwali, the Hindu festival of lights, falls on October 24 this year, and India is a major center for polishing rough diamonds.
On AIM, shares of Cake Box fell 40% after a full-year profit warning.
The maker of fresh cream cakes said inflationary pressures had risen and it had only been able to pass some of it on to franchisees, meaning its gross margin for the full year will be affected.
This was compounded by weaker than expected sales at the franchise level in July and August.
“As a result, due to the deteriorating outlook and mounting cost of living pressures on the consumer, the group now expects full year profitability to be significantly below current market expectations,” Cake Box said, adding that he doesn’t expect inflationary pressures to ease anytime soon. the end of the financial year.
In contrast, Futura Medical climbed 28%. The pharmaceutical company has announced positive results from the confirmatory Phase 3 clinical study for its MED3000 as an erectile dysfunction treatment which will be available over the counter.
“The results of FM71 are very positive, consistent with data generated in the previous Phase 3 clinical study and broadly comparable to results from a recent ‘real world’ home use study. The accumulated clinical data on MED3000 demonstrates that it presents an effective treatment option with a rapid onset of action and a favorable risk-benefit profile well suited to the OTC classification,” Futura said.
The company is on track to file with the U.S. Food & Drug Administration by the end of September, targeting MED3000 for marketing approval in the first quarter of 2023 as the “first major treatment for erectile dysfunction available over-the-counter in the United States”.
“In the United States, all clinically proven oral ED therapies are prescription only and therefore MED3000 has the potential to be a significant innovation with its key differentiator of rapid onset speed and creating a new category over-the-counter major for ED treatment,” said Chief Executive James Barder.
Gold was quoted at $1,721.51 an ounce early Wednesday, below $1,725.60 late Tuesday.
Brent oil was trading at $99.80 a barrel early Wednesday, below $99.99 late Tuesday and still below a peak above $105 seen earlier this week.
Along with eurozone inflation figures, Wednesday’s international economic calendar features German import prices and unemployment alongside inflation data from France. As of 1:15 p.m. BST, US ADP employment data is due.
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