FTSE 100 preview: Footsie looking up ahead of Fed decision

The FTSE 100 looks set to start trading marginally higher this morning, holding steady as investors await the Federal Reserve’s latest monetary policy decision. Rolls-Royce Holdings (LON:RR) will stay in focus on the corporate front, amid comments by its chief executive over Brexit.

FTSE 100 seen steady

IG’s opening calls suggest that the Footsie will start trading 0.15 percent higher at 7,454 points. In the US, shares closed higher last night, boosted by hopes for a trade deal between Washington and Beijing as President Donald Trump tweeted that he had “had a very good telephone conversation with President Xi of China”.

“Certainly, there’s ground for optimism,” said Michael Geraghty, equity strategist at Cornerstone Capital Group, ,as quoted by CNBC. “However, we have to remember there have been a lot of negotiations between China and the U.S. where they seem to be close to a deal and then things fell apart.” Asian shares have climbed higher this morning, with investors awaiting a Fed rate cut.

“Market expectations for a dovish shift are nearly universal, the only question seems to be the degree,” Blake Gwinn, head of front-end rates at NatWest Markets, told Reuters.

In the UK, the FTSE 100 rallied in the previous session, gaining 85.73 points to end trading 1.17 percent higher at 7,443.04.

Wednesday’s releases

Today’s macroeconomic releases include the UK’s consumer price index (CPI) for May, due out at 09:30 BST. IG reports that the CPI is expected to have climbed 2.25 percent year-on-year, and 0.7 percent month-on-month. The Fed rate decision will be announced at 19:00 BST, after the London market closes.

In FTSE 100 company news, Reuters reports that Rolls-Royce’s chief executive Warren East has said that uncertainties over Brexit remain an unwelcome distraction for the aerospace industry three years after Britain voted to leave the European Union. The comments come after the British engine maker inked a deal yesterday to acquire Siemens’ eAircraft business. Whitbread (LON:WTB) and Berkeley Group (LON:BKG) meanwhile are reporting this morning.