Before the open – 18/07

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Chinese shares fell last night amid ongoing concerns that the government will extend property curbs and reduce the finance available to developers continued to weigh on Chinese markets.

However, sentiment was boosted somewhat by US Federal Reserve chairman Ben Bernanke’s comments yesterday indicated he will remain dovish on monetary policy and that asset purchases “are by no means on a pre-set course”.

The broadest index of Asian shares outside of Japan was more or less flat after an early fall from highs hit on Wednesday, while the Hang Seng was down around 0.08 per cent and the Shanghai Composite around 0.73 per cent.

The Nikkei again bucked the trend, up around 1.32 per cent on the back of a slightly weaker yen from Bernanke’s comments. But investors are waiting to see what happens in next week’s Upper House elections, where prime minister Shinzo Abe is expected to win control of both houses – giving his Liberal Democrat party-led coalition its strongest hold on power since 2007. Abe has promised legislation to reform business regulation and open Japanese markets to greater competition.

The FTSE is expected to open flat or down this morning ahead of retail sales results, forecast to have grown by around 1.7 per cent in the year to June following 1.9 per cent annual growth the month before.

Key events today:

09:00: Eurozone current account

09:30: UK retail sales

13:30: US jobless claims

13:30: Westminster Hall debate on shale gas development

15:00: Federal Reserve chairman Ben Bernanke speech

15:00: US CB leading indicator

15:00: Philadelphia Fed manufacturing survey

Second Ashes Test begins at Lord’s

British Open golf tournament begins