FTSE 100 preview: Index looking up after Fed Chair remarks

on Nov 18, 2016

The UK benchmark index looks set to start the last trading day of the week on a marginally positive note, following Federal Reserve Janet Yellen’s testimony to Congress. In corporate news, Tesco (LON:TSCO) has warned suppliers not to hike prices.

IG’s opening calls suggest that the Footsie will start the day 0.08 percent higher at 6,800. The blue-chip index is likely to track US and Asia higher after Fed Chair Janet Yellen told Congress that an increase in interest rates could be ‘appropriate relatively soon’. The comments sent US shares higher last night.
“Janet Yellen has further cemented the argument that a rate could take place next month. For us, it is a Done Deal and the question which we are focused on is if the Fed is sensitive to Treasury yields,” Naeem Aslam, chief market analyst at Think Markets, said in a note, as quoted by CNBC.

Asian shares meanwhile have tracked the US higher this morning, further boosted by the outcome of a meeting between Japanese Prime Minister Shinzo Abe and US president-elect Donald Trump. Reuters quoted Abe as saying after the meeting that he was confident they “can build a relationship of trust”.
At home, the Footsie added 44.99 points to close 0.67 percent higher at 6,794.71, benefitting from a rally in miners. Royal Mail Group (LON:RMG), however, posted a hefty drop, closing seven percent lower at 464.00p, after its half-year profits fell short of expectations.

Today’s macroeconomic releases include the German producer prices index for October, due out at 07:00 GMT. On the other side of the Atlantic, Canada’s consumer prices index for October is scheduled to be released at 13:30 GMT. In other news, Sky News reported that Tesco’s boss had called on suppliers not to make UK shoppers pay for the weak pound just so they can report a healthy bottom line.

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