FTSE 100 preview: Benchmark set for cautious open ahead of rate decisions

on Sep 4, 2014
Updated: Oct 17, 2019
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iNVEZZ.com, Thursday, September 4: The FTSE 100 is set for a cautious open today ahead of interest rate decisions by the Bank of England (BoE) and the European Central Bank (ECB).

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The UK benchmark index closed higher yesterday albeit off its best levels of the day. Bolstered by upbeat services data from China and the UK and on hopes for a potential ceasefire between Ukraine and Russia, the Footsie at one point during the session reached an intraday high of 6,898.62 — a level not seen since early January 2000 – and finished 0.65 percent, or 44.41 points, up at 6,873.58.

According to trading platform IG, the FTSE 100 will open today one point down at 6,872. Trading is likely to remain fairly light in the morning, with investors looking ahead to highly-anticipated announcement by regional central banks
The ECB’s rate decision is due at 12.45 BST and President Mario Draghi is due to speak at a press conference at 13:30 BST. Of the 57 economists surveyed by Bloomberg, six project the ECB will cut its main refinancing rate to 0.05 percent today from 0.15 percent. The bank will embark on a quantitative-easing program this year or next, according to 44 percent of respondents in a Bloomberg survey last month.

In the UK, the BoE is due to announce its own rate decision at 12:00 BST. The minutes of the last meeting revealed a split of opinions in its policy committee with some believing rates should be hiked in the near term. However, the central bank is widely expected to hold off from any policy change today.
While there are no FTSE 100 companies scheduled to report financial results today, easyJet (LON:EZJ) is set to release its August traffic statistics amid a tumultuous time for the airline industry. As political unrest and government sanctions render some areas all but unvisitable, investors will be closely watching to see if the downturn is reflected in the numbers.

Last month, easyJet warned shareholders that its pre-tax profits could be lower than expected, at between £545 million and £570 million for the year to September 30 (https://invezz.com/news/equities/12219-easyjet-share-price-fails-to-take-off-after-profit-guidance EasyJet share price fails to take off after profit guidance).
**US stocks mixed, Asian markets decline**

US stocks closed mixed yesterday, coming off morning highs spurred by Eastern Europe peace hopes. In the minutes following the open, the S&P 500 and Dow Jones Industrial Average traded at record highs. The Nasdaq was also at 14-year highs before turning negative.
The Dow Jones Industrial Average closed 0.06 percent, or 10.72 points, up at 17,078.28, the S&P 500 ended 0.08 percent, or 1.56 points, down at 2,000.72, while the Nasdaq finished the session 0.56 percent, or 25.6 points, lower at 4,572.57.
With central bank decisions in focus, trading in Asia has been cautious today. As expected, the Bank of Japan (BoJ) left its monetary policy on hold at the conclusion of a two-day review and kept its economic assessment unchanged.
After a brief rise to a seven-year high, MSCI’s broadest index of Asia-Pacific shares outside Japan eased to 606.10 – 0.11 percent, or 0.68 points down — as of 06:54 BST. Meanwhile, Tokyo’s Nikkei 225 was at 15,678.43, having shed 0.32 percent, or 49.92 points from seven-month highs the previous day.

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