FTSE 100 preview: Downbeat start as Fed decision looms

FTSE 100 preview: Downbeat start as Fed decision looms
Written by:
Tsveta van Son
September 18, 2019

The FTSE 100 index looks set to open marginally lower this morning, pressured by tensions in the Middle East, and with investors staying on the sidelines ahead of the outcome of the Federal Reserve’s two-day policy meeting later today. On the corporate front, Kingfisher (LON:KGF) will continue the retailer reporting week this Wednesday.

Footsie seen lower

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IG’s opening calls suggest that the FTSE 100 will start trading 0.18 percent lower at 7,307 points. In the US, shares rose slightly last night, amid investor caution as the Fed started its meeting.

“The drama is centred on just how strongly the Fed will signal that it’s going to cut rates again by the end of 2019,” Tom Essaye, founder of The Sevens Report, said in a note, as quoted by CNBC. “It’ll be the ‘dots’ and statement that determine whether the Fed meets market expectations (and spurs a short-term rally) or if we see another ‘hawkish’ cut and uptick in volatility.”

Asian shares meanwhile have been mixed this morning, while oil prices have cooled as Saudi Arabia said full oil production would be restored by the end of the month, as reported by Reuters.

In the UK, the FTSE 100 closed little changed in the previous session, giving up 1.01 points to end trading 0.01 percent lower at 7,320.40.

Wednesday’s agenda

Today’s macroeconomic releases include the UK’s consumer price index (CPI) for August, due out at 09:30 BST. IG reports that headline CPI is expected to have climbed 1.9 percent year-on-year from 2.1 percent, and 0.6 percent month-on-month from zero. In the US, the nation’s housing starts and building permits for August will be announced at 13:30 BST. The Fed rate decision is due out at 19:00 BST, after the UK market closes.

In FTSE 100 company releases, Kingfisher is set to post results having announced a change at the top earlier this year.