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FTSE 100 preview: Index looking up after selloff

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The FTSE 100 looks set for a positive start this morning, with worries over the US-China trade war starting to abate. Despite the earnings season starting to wind down, investors will still have some updates to look out for, with some blue-chip asset managers reporting today.

FTSE 100 seen steady

IG’s opening calls suggest that the Footsie will start trading 0.17 percent higher at 7,184 points. In the US, stocks rebounded last night with China’s central bank signalling that it plans to keep the yuan at a stronger-than-feared level.

“Going forward, stabilisation in the U.S./China trade war is now the most important key to broader market stabilization,” CNC quoted Tom Essaye, founder of The Sevens Report, as saying in a note. “If the escalation continues, that will cause a further pull-back, regardless of what the [Federal Reserve] is going to do. And, I say that because another 25 or 50 basis points of easing by the Fed won’t materially offset a protracted and escalating trade war.” Asian shares meanwhile have been subdued this morning amid lingering trade war concerns.

The FTSE 100 posted another fall in the previous session, giving up 52.16 points to end trading 0.72 percent lower at 7,171.69, pressured by the ongoing trade tensions. Rolls-Royce Holdings’ (LON:RR) was the session’s biggest faller in percentage terms, as investors digested the company’s interims which pointed to persisting problems with the Trent 1000 engines.

Wednesday’s agenda

There are no major macroeconomic releases out of Europe this morning. On the other side of the Atlantic, Canada’s seasonally-adjusted Ivey purchasing managers’ index for July will be announced at 15:00 BST.

On the corporate front, investors will eye updates from Legal & General (LON:LGEN) and Standard Life Aberdeen (LON:SLA), whose results will come after the company recently agreed a settlement with Lloyds (LON:LLOY), following the bailed-out lender’s move to terminate an asset management contract early.

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