FTSE 100 watch: Footsie seen steady amid US-China trade news

FTSE 100 watch: Footsie seen steady amid US-China trade news
Written by:
Tsveta van Son
May 13, 2019

The FTSE 100 looks set to open marginally higher this morning, with investors mulling over the latest trade developments between the US and China. On the corporate front, British Gas owner Centrica (LON:CNA) is due to post a trading update this morning.

Footsie looking up

IG’s opening calls suggest that the FTSE 100 will start trading 0.16 percent higher at 7,215 points. The index is seen steady despite a fall in US futures and Asian shares this morning despite an apparent deadlock in trade negotiations between Washington and Beijing over the weekend.

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“In the immediate term, we would be watching to see if China retaliates against last Friday’s tariff increase. The performance of the equity markets would also be critical,” strategists at Singapore’s DBS Group Research wrote in a note, as quoted by CNBC. “Thus far, the selloffs in China and the US indices have been minor. A more serious decline could prompt more urgency by both sides to reach a deal.”

Reuters meanwhile quoted Michael Hanson, head of global macro strategy at TD Securities, as commenting that the market reaction would “ultimately depend on whether China and the U.S. continue to negotiate, whether the remaining $325 billion of US imports from China also get tariffed, how China retaliates, and what happens to the (section) 232 auto tariffs”.

At home, the Footsie ended Friday’s trading little changed, shedding 4.12 points to close 0.06 percent lower at 7,203.29 as investors digested corporate updates and the US-China trade relations.

Quiet Monday ahead

There are no major macroeconomic releases out of Europe to guide the market further this morning, while on the corporate front, investors will eye results from Centrica. Later in the week, investors will look out for results of a string of FTSE 100 companies, including Vodafone (LON:VOD) ,TUI (LON:TUI), Kingfisher (LON:KGF) and easyJet (LON:EZJ).