FTSE 100 preview: Index seen steady ahead of ECB meeting

on Jul 20, 2017
Updated: Mar 11, 2020

The UK benchmark index looks set to start the day on an upbeat note, extending the previous sessions gains, with sentiment remaining upbeat ahead of the European Central Bank’s (LON:ECB) policy decision later today. In company updates, easyJet (LON:EZJ) is due to post a third-quarter update.

According to IG’s opening calls, the FTSE 100 will start the session 0.17 percent higher at 7,444 points. Sentiment is likely to be upbeat today, amid stronger oil prices and ahead of the ECB rate decision. CNBC quoted Mizuho Bank FX strategist Chang Wei Liang as saying in a note that given that the bank had maintained its stance to keep policy accommodative, its rhetoric might only be adjusted slightly to emphasise that tweaks to its easing bias would depend on broadening of economic improvement.

“The press conference may be where the action may be, with [ECB President] Draghi likely to rein in the hawks – and policy convergence trades – even as the doves concede ground,” he added.
The blue-chip index is also likely to benefit from an upbeat lead from the US, where shares rose last night on the back of strong company results. Asian shares have also advanced this morning.
The Footsie rose yesterday, adding 40.69 points to end the previous session 0.55 percent higher at 7,430.91, with investors focusing on corporate updates.

Today’s macroeconomic releases include the UK’s retail sales for June, due out at 09:30 BST and IG reports that sales are expected to have climbed 0.8 percent month-on-month, and 2.3 percent year-on-year. The ECB rate decision is scheduled to be announced at 12:45 BST, to be followed by the traditional press conference at 13:30 BST. The flash eurozone consumer confidence index for July will follow at 15:00 BST.

In company releases, easyJet is expected to report a rise in third-quarter revenues. Unilever meanwhile will post a second-quarter update and Sharecast reports that analysts at Barclays expect the consumer goods group’s management to reiterate guidance for the year for growth of between three and five percent with growth to improve in the second half and with margin improvement of at least +80 basis points. There are no blue-chip companies whose shares will be trading without the attraction of their latest dividend in today’s session.