Equities Indices FTSE 100

FTSE 100 seen opening higher ahead of Fed chairman speech

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The FTSE 100 is seen opening higher on Friday, as investors hope for signals that the US central bank could make more rate cuts in the future. The benchmark is set to open some 31 points higher at 7,159, according to IG data.

Britain’s blue-chip index fell by just over 1% yesterday, despite UAE-based healthcare firm NMC Health posting a 22% gain. The company’s share price surged following a report that two groups are looking to buy a 40% stake in the firm. NMC also released its half-year results yesterday, which showed that the company had performed strongly in the six months to June 30.

The index’s losses on Thursday can be attributed in part to the Wednesday release of the minutes from the US Federal Reserve’s July policy meeting. The minutes indicated that last month’s rate cut was not a “pre-set course” for future cuts.

Today investors will be monitoring the speech of Fed chairman Jerome Powell hoping to find hints of future rate cuts by the US central bank. Yesterday, Dallas Federal Reserve Bank President Robert Kaplan told CNBC that while he would like to avoid cutting rates in September, he had an “open mind”.

Back in Europe, the UK prime minister Boris Johnson met French president Emmanuel Macron yesterday in an attempt to find a possible solution to the Irish border back stop, a key sticking point in the negotiations between the UK and the European Union. Macron signalled that slight amendments to the withdrawal agreement could still be made, but this need to happen in the next month.

“I want to be very clear,” Macron said, as quoted by Reuters. “In the month ahead, we will not find a new withdrawal agreement that deviates far from the original.”

In addition, he said that any solution must respect both the integrity of the EU single market and stability on the divided island of Ireland.

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