The FTSE 100 has slipped lower in early trade, testing support on the 7200 round number having given up the 7222 50% retracement level.

After US markets were closed yesterday, it’s very much the case that the week begins in earnest today. US futures are steady with the SPX and DOW unmoved around 2,775 and 25,880.

HSBC is weighing after the shares dipped in Hong Kong following a disappointing set of annual results. Shares in HSBC dipped over 2% and we have seen some read across to other banks with Standard Chartered down over 1%.

HSBC missed on both the top and bottom line as profits came in more than $1bn short and revenues were also c$1bn short despite rising 5% year-on-year. Pre-tax profits came in at $19.9bn versus $21.3bn expected as the market came off in the final quarter. Nevertheless, profits jumped 16% from 2017 levels and the bank is still producing cash.

Big numbers to consider:

Jaws were negative at -1.2% and this is a worry

if you are looking at how the shares might perform over the medium term.

CET1 ratio down to 14% from 14.5% a year before, against the trend we have seen but still a healthy number.

Return on average tangible equity rose to 8.6% from 6.8%, which is encouraging but doubts remain around the 10% target.

Clearly HSBC’s focus on China and Asia is a double-edged sword. There are still huge returns and opportunity in these markets, but the bank’s exposure to this region means the recent slowdown in China in particular, as well as fears about what the trade landscape will look like going forward, can bite.

BHP – H1 missed forecasts, with revenues flat at $21.59bn and EBITDA -3%, but management sees a stronger H2. Supply disruptions hit BHP hard in the first half, with management having warned in Jan of a $600m hit to earnings as a result of problems at copper and iron ore sites. Improved iron ore prices because of the Vale disaster suggest a better second half of the year is coming. Risks remain from a slowdown in China. Shares -1.7% at send time.

In currencies, the dollar has firmed, with DXY back to 96.70 having sunk to 96.50. A recovery above 87 again depends on the twin factors of the FOMC minutes and a slew of EZ PMI data later this week. EUR/USD has eased back off the 1.13 handle having failed the test around 1.1340. Support on the round number 1.13 level and then at 1.1290 before the lows at 1.1240.

Sterling was unmoved by the political drama for once, and remains supported at 1.29 for the time being. All quiet on the Brexit front for now as the Independent Group take the headlines away from the government’s floundering – a welcome distraction for some but this won’t last. The pound still looks overly sanguine on the risks ahead. On tap this morning is the UK wage data at 09:30.