FTSE 100 preview: Muted start ahead as Fed meeting looms

on Sep 16, 2016
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The UK benchmark index looks set to open little changed this morning, with investors likely to focus on the upcoming US Federal Reserve policy meeting in the absence of any major releases out of Europe to provide direction. In company news, HSBC Holdings (LON:HSBA) has scored a legal victory in the US with the dismissal of a customer class action.

IG’s opening calls suggest that the Footsie will start the session 0.01 percent lower at 6,730 points. Investors are expected to stay on the sidelines today, ahead of next week’s Fed meeting. CNBC reports that market expectations for a rate hike by the US central bank currently stand at just 12 percent after yesterday’s data releases, according to the CME Group’s FedWatch tool. Stocks on the other side of the Atlantic closed higher last night following soft economic numbers.
“Anyone still left calling for a September hike next week from the US Federal Reserve (Fed) must be feeling a bit hot under the collar after further signs of economic vulnerabilities,” Chris Weston, market analyst at IG, said in a morning note, adding that he saw a five-percent “chance of a hike next week at best”. Asian shares have tracked the US higher this morning. South Korean, Chinese, Taiwanese and Hong Kong markets, however, remain closed for holidays.
At home, the Footsie added 56.99 points to end yesterday’s session 0.85 percent higher at 6,730.30, helped by a rally in Wm Morrison Supermarkets (LON:MRW) which closed 7.49 percent higher at 208.10p after posting an upbeat set of interims.
There are no major macroeconomic releases out of Europe this morning. In the US, the nation’s consumer price index for August is due out at 13:30 BST. In corporate news, Reuters reported last night that HSBC had won the dismissal of a lawsuit by former Bernard Madoff customers who accused the lender of fuelling his massive Ponzi scheme by ignoring red flags and encouraging ‘feeder funds’ to invest with him.

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