Market Commentary

US indices posted further gains yesterday following Tuesday's US-China trade negotiation extension and also manageable CPI results. Attention turns to PPI inflation numbers today, but a rate cut is more or less 100% priced in for September now, markets can see stimulus ahead and that is always welcome. There is little else of note on the calendar today, in terms of corporate reporting Cisco Systems was more or less in line after the close yesterday, most of the reporting for Q2 is now done with Nvidia results the remaining mega cap numbers still 2 weeks away. Jackson Hole looms next week, a doveish keynote speech looks likely, and all seems fairly rosy for markets at present. Overnight Asian indices saw some profit taking following the strong start to the week on the China tariff pause. European markets remain pretty disinterested through the August summer holiday period. In the UK Q2 GDP growth was stronger than expected at 0.3% QoQ and 1.2% YoY. In UK corporate news Admiral Group reportedGroup profit before tax from continuing operations +69% to £521.0m with EPS +72% to 132.5p and announced an Interim dividend per share of 115.0p which was +65%. Secure Trust Bank reported strong profit growth, with adjusted profit before tax up 36.3% to £23.3 million on loan book growth of 6.1% to £3.8 billion. Aviva reported Group operating profit up 22% to £1,068m.

Macro markets remained pretty disinterested yesterday, attention turns to PPI inflation numbers today but it is now clear that the Fed will cut interest rates irrespective of inflation outturns given the downshift in the labour market. The USD is easing back lower in its current range, USDJPY is back under 146.50, ahead of next week's Jackson hole conference. The probability of a doveish keynote speech which signals rate cuts will start again in September is high and this could act as something of a catalyst for macro markets. Bitcoin moved up to a new record high a little shy of $124,000 overnight and looks to be leading the "risk on" trade higher again.

UK Q2 GDP growth was a little stronger than expected at 0.3% QoQ and 1.2% YoY. In the Eurozone 2nd estimates are expected to confirm GDP growth of 0.1% QoQ and 1.4% YoY. US PPI inflation is expected at 2.5% yoy.