FTSE 100 preview: Index seen subdued as investors digest ECB decision

IAG in focus amid BA strike action threat over pensions

FTSE 100 preview: Index seen subdued as investors digest ECB decision

The UK benchmark index looks set to open lower this morning, taking cues from the US and with investors digesting messages from the European Central Bank’s (ECB) policy decision yesterday. International Consolidated Airlines (LON:IAG) will be in focus today as its British Airways unit faces new strike action.

IG’s opening calls suggest that the FTSE 100 will start the day 0.15 percent lower at 7,386 points. The index is likely to take cues from the US, where shares retreated following Disney’s profit warning, and with Hurricane Irma further weighing on investor sentiment.

“Irma is front and center in my mind,” said Jack Ablin, BMO Private Bank chief investment officer, as quoted by CNBC. “It could potentially spur selling ahead of the weekend.” Ablin added that catastrophes along Florida's east coast could spell meaningful economic damage.

Asian shares meanwhile have firmed up following strong Chinese data. Investors are further mulling over the ECB decision to hold rates steady, while President Mario Draghi said that the central bank would be prepared to make a decision on its quantitative easing program at its October meeting. 

Draghi “talked about the euro, but in terms of volatility. He talked about the strength of the euro having an impact on inflation, but other than saying he’s going to watch and monitor it, there wasn’t anything to suggest that they’re going to do anything about it,” said Mitul Kotecha, head of Asia macro strategy for Barclays in Singapore, as quoted by Reuters.

At home, the FTSE 100 added 42.85 points to end the session 0.58 percent higher at 7,396.98, following the ECB’s decision to maintain its dovish monetary policy.

Today’s macroeconomic releases include the UK trade balance for July, due out at 09:30 BST. In company news, The Times reports that British Airways faces the threat of new strike action after announcing plans to close its main defined-benefit pension scheme because of a multibillion-pound black hole.

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