Sterling scaled previous 26-year highs versus the downtrodden greenback, as pound bulls bid up the domestic currency to $2.0364 despite soft UK housing data. Trading at $2.0288 in afternoon New York action, data from the Royal Intuition of Chartered Surveyors released that dwelling price inflation dropped sharply in June to its lowest in one and a half years.
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[B][U]UK Headlines:[/U][/B]
[B][I]Yen Slips After BoJ Holds Rates[/I][/B]
Sterling continues to be bolstered by firmer monetary policy as investors eye a hike to 6% by years end, mounting gains against currencies with more dovish central banks.
http://www.ft.com/cms/s/8ae6f800-305f-11dc-9a81-0000779fd2ac.html
[I]-Source: Financial Times[/I]
[B][I]Brown Reflecting on Supercasino Plans[/I][/B]
Prime Minister Gordon Brown is reflecting on plans to build a Las Vegas-style supercasino in Manchester, his spokesman said on Thursday, after Brown sparked fury among casino supporters by backing away from the proposal.
http://uk.reuters.com/article/domesticNews/idUKL1216773820070712[I]-Source: Reuters UK[/I]
[B]Rio Tinto Bid $38.1 Billion for Alcan[/B]
The dust has settled in the tug of war between Alcoa and Rio Tinto for rights to Alcan with Rio emerging as the victor. The London-based mining firm will pay $101 a share in cash for Alcan 33% more then Alcoa?s offer of $76 a share.
http://www.bloomberg.com/apps/news?pid=20601087&sid=ahiLg0783Ink&refer=home
[I]-Source: Bloomberg[/I]
[B][I]UK Market Activity:[/I][/B]
[I][U]Currency Markets:[/U][/I][B] GBP
[/B]Sterling scaled previous 26-year highs versus the downtrodden greenback, as pound bulls bid up the domestic currency to $2.0364 despite soft UK housing data. Trading at $2.0288 in afternoon New York action, data from the Royal Intuition of Chartered Surveyors released that dwelling price inflation dropped sharply in June to its lowest in one and a half years. Recently the cable has been fundamentally supported by widening global interest differentials. The hawkish tone of the BoE continues to stoke pound demand on speculation of higher lending rates as carry traders reap the benefits of the greater UK yield potential. Against the yen, sterling trades near 15-year highs at 247.64 as the BoJ announced an unchanged key rate of 50bp in the overnight.
[I][U]Equity Markets:[/U][/I] [B]FTSE 100[/B]
Halting a brief skid, leading London equities finished the session 1.24 percent higher at 6697.30. FTSE 100 investors? cheered news from Man Group as shares in the world?s largest public hedge fund tacked on 1.9 percent to 604p after expressing that assets under management increased 8.7 percent to $67 billion from $61 billion in March. Index laggards included Rio Tinto, the world?s second-largest mining firm trumped Alcoa?s bid for Canadian rival Alcan, countering Alcoa?s offer with a bid for $38.1bn in cash. Shares in Rio Tinto slipped 1.75 percent to 39.23p following an S&P statement containing plans to review the corporation?s A+ credit rating if the cash acquisition with Alcan clears, citing rising debt to equity metrics.
[I][U]Fixed-Income Markets:[/U][/I] [B]10-Year Long Gilt[/B]
Global bond yields are seen firmer across the strip as traders bore of the doom and gloom stories of the ailing subprime market and sell off issues to bank a quick profit on yesterday?s potions. Hovering around their month trough of 5.44 percent, yields on the ten-year gilt rebounded 1bp as investors continue to increase wagers on 6 percent UK borrowing rates by years end. Up 12bp since the end of May, the implied yield on the December interest-rate futures contract now trades at 6.26 percent.
