FTSE 100 preview: Footsie seen steady ahead of ECB

FTSE 100 preview: Footsie seen steady ahead of ECB
Written by:
Tsveta van Son
March 11, 2020

The FTSE 100 looks set to open higher this morning, with investors awaiting the European Central Bank (ECB) rate decision later today. On the corporate front, Aviva (LON:AV) has unveiled shake-up plans.

FTSE 100 seen higher

CNBC reports that according to IG, the Footsie is set to open 10 points higher at 7,222. In the US, shares rose last night amid expectations for a rate cut by the Federal Reserve.

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“The Fed is being very accommodative and they seem to be moving in that direction,” said Tobias Carlisle, founder of Acquirers Funds, as quoted by CNBC. “They’re inclined to cut rates by 75 basis points by the end of the year; I think it will be 25 by the end of the year, depending on what happens with Mexico and other things like that.” Asian shares meanwhile have been mixed this morning.

In the UK, the Footsie closed little changed yesterday, adding 5.93 points to end trading 0.08 percent higher at 7,220.22 as investors digested the prospects of the Fed cutting interest rates.

Thursday’s agenda

Today’s macroeconomic calendar includes the third estimate for the eurozone’s first-quarter gross domestic product, due out at 10:00 BST. The ECB rate decision will be announced at 12:45 BST, while in the US, the nation’s trade balance for April is scheduled for 13:3 BST.

“We expect the ECB to change their forward guidance on interest rates and to trim their macroeconomic projections and modify their forward interest rate guidance because of low inflation and heightened uncertainty about global trade,” CBA FX analyst Joseph Capurso told Reuters.

In company news, investors will focus on Aviva’s highly-awaited shake-up plans which come hot on the heels of news that the group’s CFO is stepping down. Rolls-Royce Holdings (LON:RR) meanwhile has announced that it is transferring pension liabilities to Legal & General (LON:LGEN).

Blue-chips, whose shares will be trading without the attraction of their latest dividend in today’s session, include Associated British Foods (LON:ABF), Johnson Matthey (LON:JMAT), Kingfisher (LON:KGF), Sainsbury’s (LON:SBRY), Scottish Mortgage Investment Trust (LON:SMT), Taylor Wimpey (LON:TW) and Vodafone (LON:VOD). Reuters’ calculations suggest that ex-divs will knock 7.2 points off the FTSE 100.