The UK benchmark index looks set to kick off June in positive territory, following news that a coalition government has been agreed in Italy, with the move easing concerns over the eurozone’s third-largest economy. Investors, however, are also likely to stay cautious ahead of the US non-farm payrolls report to be published later in the day.
FTSE 100 open higher
IG’s opening calls suggest that the Footsie is poised to start June 0.21 percent higher at 7,695 points. Investors are set to shrug off a downbeat lead from the US where shares closed in the red last night, as President Donald Trump moved to impose tariffs on steel and aluminium imports from EU, Canada and Mexico, fuelling trade war fears. Asian shares meanwhile have been mixed this morning amid trade war worries.
In the UK, the Footsie closed little changed yesterday, shedding 11.37 points to end the session 0.15 percent lower at 7,678.20. The index, however, recorded a gain for May.
“UK equities are well positioned for a late cycle backdrop, given the combination of higher quality and commodities exposure,” said Bank of America Merrill Lynch analysts, adding that valuations and low positioning made it attractive, as quoted by Reuters.
Today’s macroeconomic statements include the UK manufacturing purchasing managers’ index (PMI) for May, due out at 09:30 BST, and IG reports that the index is expected to have climbed from 53.9 to 54.8. In the US, the monthly non-farm payrolls report for May will be released at 13:30 BST, to be followed by the nation’s ISM manufacturing PMI at 15:00 BST.
In other news, The Times reports that J Sainsbury (LON:SBRY) has come under more pressure after being asked to explain the reasoning behind a pay deal which could leave 9,000 staff worse off.