The UK benchmark index looks set to start August on the back foot, ahead of a Federal Reserve rate decision, as well as more corporate earnings. Lloyds Banking Group (LON:LLOY) is one of the FTSE 100 companies reporting this morning.
Index seen lower
IG’s opening calls suggest that the FTSE 100 will start the session 0.11 percent lower at 7,740 points. The blue-chip index is likely to shrug off a positive lead from the US where shares rose last night on the back of a report suggesting that the US and China are seeking talks to defuse an escalating trade conflict, CNBC reports. Gains in Asian shares, however, have been curbed this morning following subsequent reports of US tariffs on China.
“It’s a little bit confusing, but really I think markets are [...] focused more broadly on the earnings season that’s going on in the US,” Ryan Felsman, senior economist at CommSec, told Reuters.
In the UK, the Footsie rose in the previous session, adding 47.91 points to stand 0.62 percent higher at 7,748.76, as investors continued to digest corporate releases amid the ongoing earnings season.
August’s macroeconomic releases will start with the UK’s manufacturing purchasing managers’ index for July, due out at 09:30 BST. IG reports that the index is expected to have fallen to 54 from 54.4. In the US, the ADP employment report for July is out at 13:15 BST, to be followed by the nation’s manufacturing PMI for the same month at 15:00 BST. The Fed rate decision will be announced at 09:00 BST, after the London market closes.
In corporate releases, Lloyds is expected to book more provisions for the payment protection insurance scandal in its second-quarter results due out this morning. Other FTSE 100 companies reporting today include BAE Systems (LON:BA), Rio Tinto (LON:RIO) and Prudential (LON:PRU).