US inflation figures are at the top of the agenda for investors with a new data set to be released this afternoon. Analysts and economists expect the annual inflation rate to have slowed to 3.1% in June versus 4% in May.
That would be the lowest level in more than two years. However, on a monthly basis it is expected to have hit 0.3%, up from 0.1% in May.
Danni Hewson, head of financial analysis at AJ Bell, said: “Equity and bond markets are heavily tuned into inflation data as it is crucial to central bank decisions on interest rates.
“Pre-market indicative prices point to the US market opening higher on Wednesday, suggesting that investors don’t expect a nasty shock with the inflation figures.
“A clean bill of health for the banking sector in the Bank of England’s latest stress test helped to give the FTSE 100 a lift, rising 0.4% to 7,311. Financials were in strong demand along with miners, healthcare and pharmaceuticals stocks.”
“The cost-of-living crisis continues to spur people to find cheaper alternatives when they are shopping. Among the key beneficiaries has been Shoe Zone, which continues to report solid trading. It has upgraded earnings expectations once again after a stellar month of sales, sending its shares up nearly 9%.
“Despite a fairly robust employment market, recruitment agencies are having to work hard to make money. PageGroup reported a 6.5% drop in second quarter profit and unveiled a slump in permanent job placements. Companies are preferring to adopt a more flexible approach to hiring given the uncertain economic backdrop and that is reflected by an 11.1% rise in revenue for PageGroup in temporary job placements.
“The UK was a major trouble spot for the business which suggests corporates are particularly worried about the economic outlook, despite the country having avoided recession.”