Collapse Of Republican Healthcare Plan Weakens Dollar

LONDON (Alliance News) - The pound was up against the dollar Tuesday morning, as another setback for US President Donald Trump's legislative plans came with the collapse of an attempt to craft a replacement to so-called Obamacare.

Sterling was back up near USD1.31, as Republicans in the Senate admitted on Monday they had not gathered sufficient support in their own party to vote for a draft healthcare bill. The failure casts doubts over the Trump administration's ability to marshal legislative support for its tax reform and investment plans.

In the UK, eyes are on inflation data due at 0930 BST, with forecasts that price rises will continue to overshoot the Bank of England's 2% threshold.

Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called 16.13 points lower at 7,388.00
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Hang Seng: flat at 26,473.78
Nikkei 225: closed down 0.6% at 19,999.91
DJIA: closed flat at 21,629.72
S&P 500: closed flat at 2,459.14
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GBP: up at USD1.3098 (USD1.3058)
EUR: up at USD1.1515 (USD1.1466)

GOLD: firm at USD1,237.43 per ounce (USD1,234.13)
OIL (Brent): down at USD48.36 a barrel (USD48.83)

(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Tuesday's Key Economic Events still to come
(all times in BST)

0930 UK Retail Price Index
0930 UK Producer Price Index
0930 UK Consumer Price Index
1000 Germany ZEW Survey
1330 US Export Price Index
1330 US Import Price Index
1355 US Redbook Index
1430 BoE Governor Carney speech
2130 API Weekly Crude Oil Stock
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Republicans in the US Senate will work to roll back so-called Obamacare health reforms without an immediate replacement, the chamber's Republican leader said Monday, after an initial repeal-and-replace effort collapsed. Majority Leader Mitch McConnell said the Senate will vote to take up the House healthcare bill with the first amendment being a repeal of Obamacare with a two-year delay. The change of focus from the Republicans came after two of the party's senators had signalled Monday they would not vote for the legislation.
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Bank of England Governor Mark Carney has said interest rate benchmarks should move towards being based on real market transactions, as opposed to submissions from banks, according to Reuters. The news agency reported Monday that the minutes of a BoE round table on reference rates feature Carney saying a situation where, "a judgment-based benchmark underpinned an estimated USD350 trillion-worth of contracts was not desirable". The commonly-used London Interbank Offered Rate was the subject of a rigging scandal which saw banks fined billions and the UK banking industry body previously responsible for setting the rate stripped of its powers. The benchmark is currently run by an independent firm regulated by the Financial Conduct Authority. However, Carney said in the meeting that a shift towards "fully transaction-based reference rates was necessary", according to Reuters.
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The Trump administration certified Monday that Tehran had met the terms of the nuclear deal signed in 2015, but said Iran was "in default of the spirit" of it. US President Donald Trump and Secretary of State Rex Tilleron believe Iran's activities undermine the intent of the agreement and that Iran is "unquestionably in default of the spirit of the [deal]," senior administration officials told reporters at a briefing late Monday. The State Department must inform Congress every 90 days whether Iran has met the terms of the deal.
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The Trump administration is seeking to reduce the US trade deficit through planned talks to renegotiate the North American Free Trade Agreement (NAFTA), US Trade Representative Robert Lighthizer said Monday. US President Donald Trump vowed during his presidential campaign to re-open NAFTA, which took effect in 1994 with Canada and Mexico. Lighthizer's 18-page document states the goal to "improve the US trade balance and reduce the trade deficit with NAFTA countries." In 2016, the US had a nearly USD8.00 billion trade surplus with Canada and a USD63.00 billion deficit with Mexico in goods and services. Trade between the NAFTA countries is worth more than USD1.2 trillion. In talks to revise the deal, Lighthizer said he will seek to eliminate hurdles to US investment, prevent currency manipulation by Canada and Mexico and forge stronger rules requiring content from North America in manufactured products. Negotiations with Canada and Mexico are scheduled to begin on August 16.
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BROKER RATING CHANGES
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GOLDMAN CUTS WPP PRICE TARGET TO 1995 (2090) PENCE - 'BUY'
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GOLDMAN RAISES STANDARD CHARTERED PRICE TARGET TO 970 (960) PENCE - 'BUY'
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BERENBERG RAISES GLEESON (M.J.) PRICE TARGET TO 820 (740) PENCE - 'BUY'
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RBC CAPITAL CUTS SUPERGROUP PRICE TARGET TO 1800 (1900) PENCE - 'OUTPERFORM'
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S&P GLOBAL RAISES RIO TINTO PRICE TARGET TO 3800 (3400) PENCE - 'BUY'
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RBC CAPITAL RAISES CLINIGEN PRICE TARGET TO 1120 (1020) PENCE - 'OUTPERFORM'
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HSBC CUTS ITV PRICE TARGET TO 200 (215) PENCE - 'HOLD'
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COMPANIES - FTSE 100
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Anglo-Australian mining giant Rio Tinto reported that Pilbara iron ore shipments for the second quarter were 77.7 million tonnes, 6% lower than the same quarter of 2016. Shipments were impacted by accelerated rail track maintenance. Pilbara iron ore production was 79.8 million tonnes, 1% lower than last year. Iron ore shipments guidance for 2017 is around 330 million tonnes, compared to prior outlook of 330 million tonnes to 340 million tonnes. The outlook takes into consideration first-half production and further rail maintenance in the second half to improve track conditions.
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New ITV Chief Executive Carolyn McCall has been hired on a pay package of up to GBP25.2 million, the Telegraph reported on Tuesday. McCall, who will join ITV in January from her former role as chief executive at airline easyJet, has been hired on a package which could deliver a maximum potential pay out of GBP25.2 million during her first five years at the company, the Telegraph said. The newspaper said former CEO Adam Crozier could have made up to GBP24.9 million during the same period.
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Experian said it has started the year in line with the firm's expectations, after issuing a trading update for the three months ended June 30. "We have started the year in line with our expectations, with total revenue growth of 6% and organic revenue growth of 4%. Our business-to-business services have performed well, with 7% organic growth and good performances across all regions," said Chief Executive Brian Cassin. "As we look ahead, we continue to expect growth for the year to be within our target mid single-digit organic revenue range, with stable margins and further progress in benchmark earnings per share," noted Cassin.
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Royal Mail published a trading update for the three months to June 25, saying that it had a "good start" to its financial year, with revenue 1% higher year-on-year. The postal operator's last financial year ended on March 26. The company said the rise in revenue was driven by "another strong performance" in GLS, its international logistics business. This more than offset, Royal Mail said, a 1% decline in UKPIL revenue. Chief Executive Moya Greene said GLS "continues to be the driving force" of the company. Royal Mail said it is on track to deliver full-year cost avoidance and net cash investment targets for the full year.
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British Land Announces GBP300M Share Buy-Back Programme. British Land Says Investment In Shares At Discount Offer Better Value Than Acquisitions.
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COMPANIES - FTSE 250
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IG Group FY Pretax Profit Up 3% YoY To GBP213.7M. IG Group FY Revenue Up 8% YoY To GBP491.1M. IG Group Total Dividend Up 2.9% YoY To 32.3p
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Vesuvius Appoints Patrick Andre As CEO, Replacing Francois Wanecq Who Is Retiring.
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IP Group H1 Pretax Profit GBP18.4M Vs GBP33.9M Loss YoY. IP Group H1 Hard NAV Per Share 127.8P Vs 120.9P YoY
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Assura Q1 Rent Roll Up to GBP76.9M From GBP74.4M QoQ. Assura Q1 Weighted Average Annual Rent Increase 2.1%.
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Carillion JV Wins 2 Hestia Contracts Worth GBP158M.
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Dairy Crest Q1 Trading In Line With Expectations. Dairy Crest FY Outlook Unchanged. Dairy Crest Q1 Sales Volume Of Key Brands Up 7% YoY.
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Just Group Says H1 Retirement Income Sales Up 16% On Pro Forma Basis. Just Group H1 Total Retirement Sales Up 19% To GBP742M Vs GBP625M YoY. Just Group Says It Remains Comfortable With FY Expectations
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Nostrum Oil & Gas Prices USD725 Million Notes Due 2022. Nostrum Oil & Gas Subsidiary Says USD390M Bonds Tendered By Early Participation Deadline.
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COMPANIES - LONDON MAIN MARKET AND AIM
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NCC Group FY Pretax Loss GBP55.3M Vs GBP9.4M Profit YoY. NCC Group FY Revenue Up 17% To GBP244.5M Vs GBP209.1M. NCC Group Says Business Performance Fell Short Of Expectations. CC Group Recommends FY Dividend Of 3.15P.
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COMPANIES - INTERNATIONAL
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Swiss drug giant Novartis reported Tuesday higher profit in its second quarter, despite weak net sales. A volume growth of six percentage points was offset by the negative impacts of generic competition and pricing. Further, the company confirmed its forecast for fiscal 2017. For the second quarter, net income grew 10% to USD1.98 billion from USD1.81 billion a year ago, mainly driven by divestment gains and lower amortisation. Earnings per share increased 11% to USD0.84 from USD0.76 last year. Net sales were USD12.24 billion, 2% lower than last year's USD12.47 billion. At constant rates, net sales remained flat as growth drivers offset Gleevec/Glivec Gx impact.
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Deutsche Lufthansa reported that, based on preliminary figures, its first-half adjusted earnings before interest and tax came to EUR1.04 billion compared to EUR529 million the prior year. The company generated revenues of EUR17.0 billion in the first six months of 2017 compared to EUR15.0 billion the previous year. Unit revenues at constant currency increased by 0.5% on the same period of the previous year. The company said, as opposed to the previous forecast, in particular revenue and operating profit developed better than expected due to strong demand. Pre-bookings for the economically very important third quarter have stabilised.
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Shares of Netflix surged over 8% on extended trading hours on Monday after the online-video streaming service reported a strong growth in subscriber additions both domestically and internationally driven by new original shows. Netflix's earnings for the second quarter fell shy of analyst estimates by a penny, however, revenues exceeded expectations on strong user growth.Netflix added 5.20 million subscribers globally in the quarter, well ahead of its forecast of 3.20 million, to end the quarter with 103.95 million subscribers. The company added 1.07 million customers in the US, while international subscriber additions were 4.14 million, both above expectations. Netflix's revenue for the quarter rose to USD2.79 billion from USD2.11 billion last year. Analysts had a consensus revenue estimate of USD2.76 billion for the quarter.
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Ericsson reported Tuesday that its second-quarter net loss was 1 billion Swedish kronor or 0.30 krona per share, compared to last year's profit of 1.6 billion kronor or 0.48 krona per share. Adjusted earnings per share were 0.17 krona, compared to 0.83 krona a year ago. Net sales for the quarter declined 8% to 49.9 billion Swedish kronor from 54.1 billion kronor last year. Sales, adjusted for comparable units and currency, decreased 13%. Looking ahead, the company said it sees an increased risk of further market and customer project adjustments with an estimated negative impact on operating income of 3 billion kronor to 5 billion kronor. for the coming 12 months.
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Tuesday's Shareholder Meetings

FirstGroup
British Land Co
Dairy Crest Group
N Brown Group
Assura
Bloomsbury Publishing
IG Group Holdings
Scapa Group