Wednesday Morning Markets: Steady Inflation Fails to Lift FTSE

UK inflation came in slightly cooler than feared this morning, but it wasn’t enough to push the FTSE 100 into positive territory.

The index is off 0.2%, with the FTSE 250 down 0.1%. On the continent, the DAX falls 0.6%, while the CAC 40 and Stoxx 50 trade flat.

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UK Inflation

Inflation in the UK unexpectedly held at 2.8% for May, unchanged from the 13-month low reached in ‌April, official data showed.

The number is below the consensus expectation of 3%. It comes a day before the Bank of England rate decision and should remove any pressure for an immediate rate rise.

Movers

Rolls-Royce (RR. +2.12%) leads the risers, while Barclays (BARC +1.64%) is also climbing. Today, Barclays published a bullish research note, raising its STOXX 600 year-end target to 670 from 620 and dropping its Europe Underweight stance.

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Despite gold prices edging lower, Endeavour Mining (EDV +1.54%) has also gained.

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On the downside, Entain (ENT -2.55%) is the biggest faller. Vodafone (VOD -2.42%) and Airtel Africa (AAF -2.38%) have both declined in a broader telecoms selloff.

Results

AO World (AO.) shares opened higher but are currently down following its full-year results. Meanwhile, PZ Cussons (PZC) posted a trading update today, lifting its profit guidance and sending its shares significantly higher.

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Elsewhere, Hargreaves Lansdown analysts said their “concerns about Boohoo haven’t disappeared,” in a note following the company’s latest results, which sent its shares around 2% lower on Tuesday.

Tonight: The Fed

The FOMC decision is due this evening, with the Fed funds rate expected to be held at 3.75%. Focus will fall on the dot plot and Chair Warsh’s tone on the timing of future cuts.