Home ForexFTSE Pre-open: FTSE 100 called higher on oil bounce and Fed reticence

Pre-open: FTSE 100 called higher on oil bounce and Fed reticence

by Paul

London’s larger shares are expected to start on the front foot thanks to a positive Wall Street session and an oil rebound, while mid-caps are predicted to have a tougher time as the Brexit worries continue to impinge.

Sterling was moving higher in the Asian session, up 0.34% against the dollar to 1.2975 and up 0.45% on the euro to 1.1702.

Although minutes of the Federal Reserve’s latest rate setting meeting revealed the committee’s caution ahead of the EU referendum vote on these shores, the market seemed to breathe a sigh of relief that a rate hike is not immediately around the corner.

Oil prices moved off one-month lows thanks to a larger than expected draw in API inventories.

“The cautious tone from the FOMC minutes on Wednesday may be giving investors a lift today,” said analyst Craig Erlam at Oanda. “The Brexit vote alone is likely to deter them from raising rates until at least the end of the year as they wait to see what the knock on effects will be, both from an economic and financial markets perspective.”

Thursday will see meeting accounts from the European Central Bank’s mid-June June meeting, though like their US counterparts’ they will be somewhat outdated but could still move the markets.

There will also be data on UK manufacturing and industrial production data.

CMC analyst Michael Hewson said: “Given the sharp contraction seen in the equivalent May manufacturing PMI numbers it is hard to see how these numbers could match the sharp gains seen in the April numbers. In April we saw a rebound of around 2% in both which was rather surprising. The May numbers are expected to show a decline of in excess of 1% for both numbers.”

Related News

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More