FTSE 100 preview: Index set for a quiet start ahead of ECB meeting

on Jun 5, 2014
Updated: Apr 9, 2020

iNVEZZ.com, Thursday June 5: The FTSE 100 Index is seen opening slightly higher ahead of today’s meeting of the European Central Bank’s governing council, where the bank’s policymakers are expected to announce measures to prevent falling inflation.

The Footsie eased 0.26 percent to 6,818.63 points yesterday amid disappointing jobs data from the US. Supermarket giant Tesco Plc (LON:TSCO) fell one percent after reporting a third consecutive quarter of falling sales (Tesco share price: Grocer reports 3.8% fall in Q1 sales).

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According to data from IG, the UK’s blue-chip index will open around five points higher today.
**US, Asia**
American equity markets ticked up yesterday despite the release of a weaker than expected jobs data for May. The ADP non-farm payroll report, which focuses on the private sector, found that US companies added 179,000 positions last month, well below analysts’ expectations of 215,000 job additions. However, the ISM non-manufacturing index rose to 56.3 in May, above expectations of 55.5, which partially offset the effect of the disappointing jobs figures.

“ISM balances out a disappointing ADP and a disappointing trade number,” Art Hogan, chief market strategist at Wunderlich Securities, said, as quoted by CNBC.
The Dow Jones Industrial Average yesterday rose 0.09 percent to 16737.53 points, while the S&P 500 notched up 0.19 percent to close at a new high of 1,927.88 points. Meanwhile, the technology-heavy Nasdaq halted its losing streak and closed 0.41 percent higher at 4251.64 points.

Asian equity markets declined today as investors were cautious ahead of the ECB policy meeting in Frankfurt. Japan’s benchmark Nikkei 225 index was down 0.2 percent at 15,037.50 points as of 05:46 BST and the Shanghai Composite was slightly lower at 2,024.04 points as of 04:30 BST.

The main macroeconomic news today will come from Frankfurt, where ECB policymakers will decide what measures to deploy in order to ward off a potential deflation cycle. Interest rate cuts, cheap loans to banks or even a Federal Reserve-style asset purchase programme are all on the cards. The bank’s policy decision is due out at 12:45 BST, with the following press conference due to begin at 13:30 BST.
The Bank of England is to announce its monetary policy decision at 12:00 BST, with analysts expecting interest rates to remain unchanged, and retail sales data for the euro zone will be released at 10:00 BST. In FTSE 100 corporate releases, specialty chemicals group Johnson Matthey Plc (LON:JMAT) will report results for the year ended March 31 and easyJet Plc (LON:EZJ) will post traffic figures for last month.


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