FTSE 100 preview: Fed minutes to weigh on index

on Feb 22, 2018

The UK benchmark index looks set to post a hefty drop this morning following the release of the minutes from the latest Federal Reserve meeting. With the earnings season in full swing, investors have a lot to look forward to on the corporate front, including Barclays’ (LON:BARC) full-year results.

Index seen tumbling

IG’s opening calls suggest that the FTSE 100 will start the session 1.02 percent in the red at 7,207 points. The blue-chip index is likely to take cues from the US, where stocks fell last night after the Fed minutes signalled expectations of faster economic growth.

“The made it clear that you’re going to see more rate hikes,” said Quincy Krosby, chief market strategist at Prudential Financial, as quoted by CNBC. “The question for the market now is how many.” Asian shares have tracked the US lower this morning, with investors fearing more rate hikes ahead.

At home, the Footsie rose in the previous session, adding 34.80 points to close 0.48 percent higher at 7,281.57, with investors digesting corporate earnings.

Thursday’s calendar

Today’s macroeconomic releases include Germany’s IFO index for February, due out at 09:00 GMT, to be followed by a second estimate of the UK’s fourth-quarter gross domestic product at 09:30 GMT. IG reports that growth is expected to come in at 0.5 percent quarter-on-quarter and 1.5 percent year-on-year.

Investors are facing an earnings-heavy corporate calendar today, including updates from Barclays, Anglo American (LON:AAL), BAE Systems (LON:BA), British American Tobacco (LON:BATS), Centrica (LON:CNA) and RSA Insurance (LON:RSA).

Blue-chips, whose shares will be trading without the attraction of their latest dividend today, include Carnival (LON:CCL), Diageo (LON:DGE), GlaxoSmithKline (LON:GSK) and Imperial Brands (LON:IMB). Reuters’ calculations suggest that ex-divs will knock 9.1 points off the FTSE 100.