FTSE 100 preview: US-China trade hopes to continue to support index

The FTSE 100 looks set to open higher this morning, following positive leads from the US and Asia, with investors remaining hopeful of a US-China trade deal. GlaxoSmithKline (LON:GSK) will be in focus today as rival Mylan priced its generic version of the London-listed group’s Advair drug.

Index to open higher

IG’s opening calls suggest that the Footsie will start trading 0.52 percent higher at 7,170 points. The blue-chip index is likely to take cues from the US, where a deal to avoid a government shutdown and hopes for a trade deal with China buoyed sentiment last night.

Both countries can reach a ‘superficial agreement’ that ‘appease the market’s anxiety; that’s a simple trade agreement,” Matt Lloyd, chief investment strategist at Advisors Asset Management, told CNBC. Asian shares have tracked the US higher this morning.

In the UK, the FTSE 100 ended the previous session little changed, giving up 4.03 points to close 0.06 percent higher at 7,133.14, giving up most of its earlier gains amid ongoing Brexit worries. Reuters reported that investors were tense ahead of Thursday, when the UK parliament will debate Brexit with no date yet set for a further vote on Prime Minister Theresa May’s deal.

Wednesday’s releases

Today’s macroeconomic statements include the UK’s consumer price index (CPI) for January, due out at 09:30 GMT. IG reports that the index is expected to have climbed two percent year-on-year, from 2.1 percent. The US CPI for January is due out at 13:30 GMT.

On the corporate front, Smurfit Kappa (LON:SKG) has posted its final results, while BHP Group (LON:BHP) has updated the market on a Gulf of Mexico project. In other news, Reuters reports that Mylan has priced its generic version of GSK’s blockbuster asthma treatment Advair 70 percent lower than the branded medicine.