FTSE 100 preview: Index seen higher ahead of Carney speech

on Sep 18, 2017

The UK benchmark index looks set to open higher this morning, finding support in stronger oil and with investors looking out for comments by Bank of England Governor Mark Carney. BAE Systems (LON:BA) will be in focus on the corporate front today, with Qatar set to order Typhoon jets from the UK defence giant. 

IG’s opening calls suggest that the FTSE 100 will start the day 0.40 percent higher at 7,244 points. The index is set to recover from the previous week’s selloff finding support in firmer oil as the number of US rigs drilling for new production fell. In the US, stocks rose on Friday, boosted by information technology and financials. Asian shares meanwhile have tracked the US higher this morning. 

At home, the FTSE 100 tumbled on Friday, shedding 79.92 points to close 1.10 percent lower at 7,215.47, as a BOE official flagged a rate hike going forward.

There are no major macroeconomic releases out of Europe to guide the markets this morning. At home, BOE Governor Mark Carney is set to deliver a speech at 08:00 BST, and investors are likely to be eyeing more clues about the bank’s monetary policy. Later during the week, the US Federal Reserve is set to hold a monetary policy meeting.

“[D]raining the economy of cheap money can't be viewed as a positive for markets accustomed to feeding off central bank largess. Why investors are so complacent is a mystery, but perhaps the reality check will set in midweek,” Stephen Innes, APAC head of trading at OANDA, said in a note, as quoted by CNBC.

In company news, Reuters reports that Qatar’s defence minister has signed a letter of intent to purchase 24 Typhoon jets from British defence group BAE Systems, in a move that could anger other Gulf countries boycotting Doha.