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FTSE Gains, Pound Expected to Rise Vs Euro on BOE Tapering

Pound Expected to Rise Vs Euro on BOE Tapering

The Bank of England is likely to leave its policies unchanged in Thursday's decision but may further scale back bond purchases later this year, sending sterling modestly higher versus the euro, Rabobank says. "Assuming a fairly stable position for U.K. markets through the summer and assuming the economic outlook remains favorable, we see scope for some extra tapering from the BOE into the autumn," Rabobank forex strategist Jane Foley says. The BOE, which last month slowed the pace of its bond-buying, announces its policy decision at 1100 GMT. Rabobank expects EUR/GBP to fall to 0.84 within six months, from 0.8553 at present.

Companies News: 

Robinson Year-to-Date Earnings Lower Than in 2020; Shares Fall

Shares in Robinson PLC fell Thursday after the company said that year-to-date earnings are lower than in the year-earlier period, and that this is a result of the short-term transitional effect of the rise in the price of resin.


First Property Group Suspends Final Dividend After FY 2021 Loss, Shares Drop

Shares in First Property Group PLC fell Thursday morning after it reported a loss for fiscal 2021 and suspended the final dividend.


UK Takeover Panel Agrees Extension to Augean, Morgan Stanley Takeover Deadline

Augean PLC said Thursday that the U.K. Takeover Panel has agreed to extend the deadline for Morgan Stanley Infrastructure Inc. to make an offer for the U.K. waste-management company or walk away in order that they can continue talks.


Atlas Copco Buys UK Air-Compressor Supplier

STOCKHOLM--Swedish industrial tool maker Atlas Copco AB said Thursday that it has acquired U.K.-based Airflow Compressors & Pneumatics Ltd (Airflow) for an undisclosed price.


San Leon Agrees to $8.5 Mln Investment in Nigerian Oil Export Project; Shares Rise

Shares in San Leon Energy PLC rose Thursday morning after it agreed to acquire a further interest in the Alternative Crude Oil Evacuation System project in Nigeria.


CMO Group to Float on London's Junior AIM

Online building-material retailer CMO Group PLC said Thursday that it plans to float on London's junior AIM early next month.


Edenville Energy on Track to Achieve Full Order Book for Tanzanian Coal Mine

Edenville Energy PLC said Thursday that it expects to achieve a full order book for its Rukwa coal project in Tanzania in the next few months.


Alpha Financial Markets FY 2021 Pretax Profit Fell Slightly

Alpha Financial Markets Consulting PLC on Thursday reported a small decrease in pretax profit for fiscal 2021 and said that all of its regions performed well and revenue grew in the year.


Maternity-Wear Brand Seraphine Confirms London IPO Plan; To Raise GBP61 Mln

British maternity- and nursing-wear brand Seraphine said Thursday that it plans to raise 61 million pounds ($85.2 million) of new money and proceed with an initial public offering on the London Stock Exchange next month.


LungLife AI, Inc. to Float on London's Junior AIM

LungLife AI, Inc. said Thursday that it plans to float on London's junior AIM early next month.


R.E.A. Holdings Agrees to Replace Current Loan, Working Capital Facility

R.E.A. Holdings PLC said Thursday that its subsidiary PT REA Kaltim Plantations has conditionally agreed with its Indonesian bankers to replace its current loan with two new loans, and has agreed a new working capital facility to replace its current one.


Universe Group Chairman Buys Additional Stake for More Than GBP1 Mln

Universe Group PLC said Thursday that its Executive Chairman Andrew Blazye has spent 1.1 million pounds ($1.5 million) to acquire a further stake in the company.


San Leon Enters Talks to Merge With Nigerian Partner Midwestern Oil & Gas

San Leon Energy PLC's trading on the AIM was suspended on Thursday morning because it is in talks for Midwestern Oil & Gas Co. to reverse into the company.

Market Talk: 

BOE Unlikely to Raise Rates Until 2023

1004 GMT - U.K. inflation could accelerate in coming months but should ease next year, prompting the Bank of England to defer is first post-pandemic interest rate rise until 2023, Pantheon Macroeconomics says. "We doubt that a period of above-target consumer price inflation, caused by a rebound in commodity prices and a snap back in prices in lockdown-hit sectors, will evolve into a more deep-rooted problem," Pantheon economists say. Inflation should peak at 2.8% later this year before falling below the BOE's 2% target in 12 months' time as labor market slack increases on the withdrawal of jobs support, coronavirus-related costs ease and the downward impact of sterling's recent appreciation builds to a peak in mid-2022, they say.


Crest Nicholson's Operational Efficiency Program Drives Margin Improvement

0936 GMT - Crest Nicholson's renewed focus on cost discipline and operational efficiency should help to drive improved volumes, profitability and margins for 2021 estimates, Barclays says. The house builder's balance sheet has strengthened significantly after a swing to GBP130 million net cash, which gives it scope to widen its geographical footprint, the U.K. banks says. Furthermore, the company has guided for gross margins of around 19% for fiscal 2021, and over 21% for fiscal 2022, and upgraded its pretax profit guidance, the bank says. "Crest's margins are beginning to yield the benefits of fewer legacy sites and the operational efficiency program," the bank says. Barclays rates the stock equal weight and raises its target price to 420 pence from 375 pence.


Crest Nicholson Swings to 1H Profit, Rivals Gain

0911 GMT - Shares in Crest Nicholson Holdings rise 4% and rivals also gain after the U.K. builder reported a swing to a first-half pretax profit and voiced confidence about the market outlook. The FTSE 250-listed group is making good progress on its turnaround, with a much-improved balance sheet, focus on further margin improvement and, in the longer-term, volume growth, Canaccord Genuity says. "The share price has outperformed the wider sector [in the] year to date, but valuation continues to look reasonable. We expect the shares to react well," says Canaccord analyst Aynsley Lammin. Crest's FTSE 100 rivals Berkeley Group, Barratt Developments, Taylor Wimpey and Persimmon all rise.


Pound's Rise Seen as Limited if BOE Sounds More Upbeat

0902 GMT - The Bank of England could be slightly more upbeat about the economy in its policy statement later but not enough to give sterling a considerable boost, BDSwiss Group says. Since the BOE's last meeting in May, economic growth has accelerated, inflation has risen and unemployment has fallen but that's "pretty much what they expected," BDSwiss analyst Marshall Gittler says. The BOE must also be concerned about the recent pick-up in coronavirus cases and the four-week extension of restrictions, he says. That means the BOE might be a "bit more optimistic" but is unlikely to change its policies or forward guidance, he says. "GBP could benefit slightly from an improvement in tone." The BOE's decision is at 1100 GMT.


Traders to Parse BOE's Minutes For Hawkish Tone

0858 GMT - Most investors will be looking for a hawkish tone at Thursday's Bank of England rate decision that would point to future tightening of monetary policy, and this could lead to disappointment, says Mizuho. "The latest Consumer Price Index print was a promising 2.1%, and if the BOE were to make a comment around inflation expectations becoming less well-anchored this would be a notable move," it says. Otherwise, an underwhelming BOE is most likely to see sovereign bonds rally led by the gilts of intermediate maturities and 10-year gilts, as pricing of interest rate rises is eased off, Mizuho says. The closing paragraphs of the minutes will be the place to look for any shift in tone.


BOE Unlikely to Announce Any Chances to Policy

0758 GMT - The Bank of England is unlikely to announce any changes to the bank rate, the asset purchase target or guidance at its meeting Thursday, says UniCredit. However, recovery prospects could lead bank officials to adopt a more aggressive tone regarding the tightening of monetary policy. "The rapid recovery in prospects and the stronger-than-expected rise in consumer price index inflation, by 0.6 percerntage points to 2.1% year on year in May, could give the Monetary Policy Committee minutes a slightly hawkish tone," it says. UniCredit expects the BOE to leave the bank rate and the target stock of asset purchases unchanged through 2022, but sees risks skewed towards action some time in 2022.


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

(END) Dow Jones Newswires

June 24, 2021 06:41 ET (10:41 GMT)

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