Equities Indices

FTSE 100 preview: Muted start after Fed Chair comments

The FTSE 100 looks set to start the day on the back foot, with market sentiment around the world taking a hit after comments by the US Federal Reserve Chairman which tempered expectations for a rate cut by the US central bank. BP (LON:BP) will be in focus today as it passed a regulatory hurdle in Mexico.

FTSE 100 seen lower

Reuters reports that the Footsie is seen opening 17 points lower at 7,405 points this morning. The blue-chip index is likely to take cues from the US where shares fell last night after Fed Chair Jerome Powell said that the central bank was assessing whether current economic uncertainties call for lower rates.

“Bond markets appear to be signalling an economic slowdown, while equities suggest growth will continue in a low inflation Goldilocks scenario,” said Mark Haefele, global chief investment officer at UBS Global Wealth Management, as quoted by CNBC. “Both stories only make sense if we conclude bond markets are focused on a pre-emptive Fed strike to forestall the risk of a recession, while equities are telling us that the Fed will be successful.”

The FTSE 100 closed little changed yesterday, giving up 5.74 points to end trading 0.08 percent lower at 7,422.43, with investors remaining on the sidelines ahead of  this week’s G20 summit. Blue-chip supermarkets weighed on the index, with investors reacting negatively to the latest industry data. Asian shares have tracked the US lower this morning.

Wednesday’s releases

Today’s macroeconomic calendar includes Germany’s GfK consumer confidence index for July, due out at 07:00 BST. In the US the nation’s durable goods orders for May will be announced at 13:30 BST. On the corporate front, Bunzl (LON:BNZL) is scheduled to post results this morning.

In other FTSE 100 company news, Reuters reports that Mexico’s oil regulator has approved a $97-million plan for drilling in an offshore area operated by BP in the southern Gulf of Mexico.

Tsveta van Son 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.
Rate this post
Total: 0 Average: 0

Investing is speculative. When investing your capital is at risk. This site is not intended for use in jurisdictions in which the trading or investments described are prohibited and should only be used by such persons and in such ways as are legally permitted. Your investment may not qualify for investor protection in your country or state of residence, so please conduct your own due diligence. This website is free for you to use but we may receive commission from the companies we feature on this site. Click here for more information.