FTSE 100 preview: Index to track Asia lower after Fed minutes

FTSE 100 preview: Index to track Asia lower after Fed minutes
Written by:
Alice Young
23rd November 2017

The UK benchmark index looks set to open lower this morning, tracking Asia lower, with investors focusing on the minutes from the latest Federal Reserve policy meeting. Royal Bank of Scotland Group (LON:RBS) will be in focus today amid the government’s plans to reprivatise the bailed-out lender.

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Downbeat start ahead

IG’s opening calls suggest that the FTSE 100 will start the session 0.23 percent lower at 7,402 points. The blue-chip index is likely to take cues from Asia where shares have been subdued this morning after the latest Fed minutes, which showed that policymakers were positive about the economy.

“[T]he December rate hike seems as close to a done deal as one can ever get, though there was some interesting debate on what to do next year, with the current depleted FOMC camp split on how to operate when the inflation gauge is no longer a reliable pointer,” Rob Carnell, Asia head of research at ING, said in a morning note, as quoted by CNBC. Shares in the US meanwhile closed higher last night.

In the UK, the Footsie closed marginally higher yesterday, adding 7.68 points to end the session 0.10 percent higher at 7,419.02, as investors digested the budget statement.

Thursday’s calendar

Today’s macroeconomic releases include the flash November manufacturing and services purchasing managers’ indices for France, Germany and the eurozone, due out between 08:00 GMT and 09:00 GMT, to be followed by the second estimate for the UK’s third-quarter gross domestic product at 09:30 GMT. US markets will be closed for Thanksgiving today.

On the corporate front, Centrica (LON:CNA) and Severn Trent (LON:SVT) will post results this morning. Blue-chips, whose shares will be trading without the attraction of their latest dividend, include Carnival (LON:CCL), DCC (LON:DCC), National Grid (LON:NG) and Vodafone (LON:VOD). Reuters’ calculations suggest that ex-divs will knock 6.89 points off the Footsie.

In other news, the UK signalled that it will return RBS to private ownership by selling £15 billion of shares. 

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