The FTSE 100 is expected to start slightly higher on Wednesday as traders look set to keep their powder dry ahead of the outcome of the Federal Reserve’s meeting later.
Spread-better IG expects the FTSE 100 to open around 11 points higher after ending Tuesday’s session down 137 points at 6,335.
Market sentiment appears to have been dampened by a growing chorus of multinational authorities forecasting dire economic conditions as the full effects of the coronavirus pandemic and ensuing lockdowns become more apparent later this year. The World Bank warned previously that the global economy could shrink by as much as 5.2%, the worst such decline since the 1940s.
As a result, traders are likely to keep a close eye on the Fed’s economic forecasts, as well as the central bank’s reaction to the surprise upturn in US jobs numbers posted last week.
Growing pessimism made for a mixed finish on Wall Street overnight, with the Dow closing 1.09% lower at 27,272 while the S&P 500 fell 0.78% to 3,207. The tech-heavy Nasdaq, however, seemed to brush off the negativity, rising 0.29% to a fresh record of 9,953.
“While traditional industries are struggling on account of the [coronavirus] crisis, the tech sector is cleaning up as it is open for business. Technology was already becoming a larger part of our everyday life before the pandemic, but now the embrace of tech has been sped up out of necessity”, said David Madden at CMC Markets UK.
Despite the mixed session in the US, the Asian markets managed to move into positive territory early on Wednesday, with the Japanese Nikkei 225 rising 0.12% while Hong Kong’s Hang Seng rose 0.27%.
On the currency markets, the pound was up 0.23% at US$1.2755 against the dollar, although US inflation data due later today could provide some catalysts for movement.
Significant announcements expected on Wednesday:
Fed interest rate decision
Finals: Londonmetric Property PLC (LON:LMP), Castings PLC (LON:CGS), VP PLC (LON:VP.)
Interims: Shaftesbury PLC (LON:SHB), Paragon Banking Group PLC (LON:PAG)
Economic data: US inflation
Around the markets:
Sterling: US$1.2755, up 0.23%
Brent crude: US$40.63 a barrel, down 1.3%
Gold: US$1,717 an ounce, up 0.11%
Bitcoin: US$9,774, up 0.98%
City headlines:
Aviva has publicly challenged HSBC and Standard Chartered over their support for China’s new security law for Hong Kong – Times
Vodafone has warned that removal of Huawei from the UK’s telecoms infrastructure would dealt a terminal blow to the hopes of the country leading the world in 5G technology – Financial Times
Emirates has cut thousands of jobs as the world's biggest longhaul airline contends with the decimation of international air travel – Telegraph
Segro, a UK property group that specialises in warehouses, has unveiled plans to raise £650m to fund the acquisition of new distribution facilities – Guardian
Retail shareholders in the US are betting on bankrupt companies in a sign of the speculative investment wave sweeping across the US market – FT
BDO now audits the second-highest number of listed companies in the UK as moves to shake up the sector have driven an increasing number of companies to firms outside the “Big Four” - FT
https://news.google.com/__i/rss/rd/articles/CBMieWh0dHBzOi8vd3d3LnByb2FjdGl2ZWludmVzdG9ycy5jby51ay9jb21wYW5pZXMvbmV3cy85MjE1NDEvZnRzZS0xMDAtdG8tcmVib3VuZC1zbGlnaHRseS1hcy1mb2N1cy10dXJucy10by1mZWQtOTIxNTQxLmh0bWzSAT5odHRwczovL3d3dy5wcm9hY3RpdmVpbnZlc3RvcnMuY28udWsvY29tcGFuaWVzL2FtcC9uZXdzLzkyMTU0MQ?oc=5
2020-06-10 05:48:48Z
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