Before the open - 17/07

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Chinese shares fell last night for the first time in three days as real estate developers like China Vanke and Poly Real Estate Group plummeted over concerns the government will extend property curbs. News that foreign direct investment in China rose by 20 per cent in June – exceeding analyst expectations of a 0.7 per cent gain following last month’s 0.3 per cent rise – was enough to push the Hang Seng up and the Shanghai Composite back towards neutral territory.

The Nikkei also managed to erase early losses, although its clear central bankers are at odds over monetary policy from the June minutes released by the Bank of Japan last night. Some board members want to supply longer-dated fixed-rate funds in market operations to curb excessive interest rate volatility, but others think this could misinterpreted by markets.

Asian markets are also being held up by expectations that US Federal Reserve chairman will reiterate today and tomorrow that monetary policy will remain accommodative when he testifies in Congress. It is hoped he will use the occasion to provide further clarity on when the Fed plans to begin tapering off its quantitative easing.

Again there, seems to be uncertainty where the FTSE will open this morning.

Key events today:

0930: Bank of England Monetary Policy Committee minutes

0930: UK claimant count change, average earnings, ILO unemployment

1000: Eurozone construction output

1330: US housing starts, building permits

1500: Fed chairman Bernanke speaks