FTSE 100 preview: Index to track US and Asia higher amid trade talks

The FTSE 100 looks set to open higher this morning, amid hopes that the US would reach a trade deal with China. Retailers will come firmly into focus today with Wm Morrison Supermarkets’ (LON:MRW) trading update.

Footsie looking up

IG’s opening calls suggest that the FTSE 100 will start trading 0.15 percent higher at 6,821 points. The blue-chip index is likely to take cues from the US where shares rose last night as the US-China trade talks kicked off. Reuters reported that US Commerce Secretary Wilbur Ross had predicted that Beijing and Washington could reach a trade deal that ‘we can live with’.

“The January effect will likely continue, but the market will be erratic as the trade talks continue,” said Peter Cardillo, chief market economist at Spartan Capital Securities, as quoted by CNBC. “The real key is trade. Any sign that trade talks are going well could send the market to the upside.” Asian shares meanwhile have tracked the US higher this morning.

Masanari Takada, cross-assets strategist at Nomura Securities, told Reuters, however, that many investors were “still trying to play it safe and it is yet to be seen whether the recovery continues, or ends up as a short-term relief rally”.

In the UK, the FTSE 100 fell in the previous session, giving up 26.54 points to close 0.39 percent lower at 6,810.88, with the US-China trade talks failing to stoke investor sentiment.

Tuesday releases

Today’s macroeconomic releases include eurozone business confidence data for December, due out at 10:00 GMT. On the other side of the Atlantic, the US trade balance for November, will be announced at 13:30 GMT. On the corporate front, Morrisons will update on trading, a day after it slashed prices in the latest salvo in the ongoing supermarket war.