UK retail sales beat forecasts; GBP looks to recover

An unexpected rise in UK retail spending during June has come as a welcome development for the pound with the currency looking to recover after hitting its lowest level in over 2 years against the US dollar yesterday.  A print of +1.0 M/M is well above the -0.3% consensus forecast and means that for 5 of the 6 months this year that the data has been released, it has been better than expected. The resilience of the consumer in the face of ongoing political uncertainty is both surprising and admirable, suggesting that despite heightened levels of uncertainty people are keeping calm and carrying on. What is more, the usual suspects behind a summer pick-up in consumer spending such as warm weather and sporting events have not really been felt in these numbers, with the England cricket team’s heroic performances likely to boost the next month’s release.   

FTSE slides back near 2-week low

Stocks in London have drifted lower this morning, with the FTSE back at the 7500 handle. The FTSE hit its highest level since last August just 2 weeks ago, but a bit of softness seems to be creeping back into the market. In general the lift that equities around the globe received from the positive trade news out of the G20 meeting at the end of last month has faded out, and traders are now back to focusing on growth prospects and to what degree central banks will provide monetary accommodation. 

ASOS shares plunge after profits slump

There’s been a significant drop in the stock of ASOS after the online fashion retailer delivered a profit warning. Pre-tax profits of £30-35M for 2019 are now expected according to the firm, almost 50% below the previous analysts’ consensus of around £55M. This news comes as a real blow to the firm that has been attempting to arrest a testing 2-year slide in its stock price after previously impressive growth figures have been eroded due to shrinking margins and heavy capital spending.