FTSE 100 preview: Muted start ahead of Fed Chair testimony

FTSE 100 preview: Muted start ahead of Fed Chair testimony

The FTSE 100 looks set to open little changed this morning, with investors awaiting the testimony of Federal Reserve Chair Jerome Powell which will be eyed for clues on the US central bank’s monetary policy. In company news Barratt Developments (LON:BDEV) has posted a trading update this morning.

FTSE 100 seen flat

IG’s opening calls suggest that Britain’s blue-chip index will start trading 0.05 percent higher at 7,540 points. In the US, shares fell last night ahead of Powell’s testimony.

“While by no means a done deal, our base is still that the Fed will cut rates pre-emptively in July,” said Mark Haefele, global chief investment officer at UBS Global Wealth Management, as quoted by CNBC. “However, even after Friday’s reaction to the strong jobs data, markets are pricing close to 1% of rate reductions by the end of next year. We think markets have gone too far in pricing lower rates.” Asian shares meanwhile have climbed higher this morning.

In the UK, the Footsie closed little changed in the previous session, giving up 12.80 points to end trading 0.17 percent lower at 7,536.47, with investors staying on the sidelines ahead of this week’s Fed Chair comments. Ocado (LON:OCDO) was the session’s biggest riser in percentage terms despite posting a wider interim loss.

Wednesday’s releases

This Wednesday’s macroeconomic releases include the UK’s gross domestic product (GDP) for May, due out at 09:30 BST. IG reports that growth is expected to come in at 1.4 percent in May, from 1.3 percent. Minutes from the Fed’s latest policy meeting are scheduled to be released at 19:00 BST, after the London market closes.

On the corporate front, Barratt Developments has posted a trading update, while GlaxoSmithKline (LON:GSK) has unveiled the results from a study evaluating a prospecting HIV treatment.

By Tsveta van Son
Tsveta van Son is part of Invezz’s journalist team. She has a BA degree in European Studies and a MA degree in Nordic Studies from Sofia University and has also attended the University of Iceland. While she covers a variety of investment news, she is particularly interested in developments in the field of renewable energy.
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