30th Jan 2025 06:58
(Alliance News) - The FTSE 100 is set to open a touch lower on Thursday, with monetary policy remaining in focus, as the European Central Bank's rates decision looms following the Federal Reserve's hold overnight.
IG says futures indicate the FTSE 100 to open 6.1 points lower, 0.1% at 8,551.71 on Thursday. The index of London large-caps ended up 23.94 points, 0.3%, at 8,557.81 on Wednesday.
The pound traded at USD1.2438 early Wednesday, largely unmoved USD1.2435 late Tuesday. The euro fell to USD1.0413 from USD1.0419. Against the yen, the dollar slipped to JPY154.43 from JPY155.08.
A barrel of Brent declined to USD75.90 from USD77.21. An ounce of gold rose to USD2,761.81 an ounce from USD2,752.18.
In New York on Wednesday, the Dow Jones Industrial Average lost 0.3%, while the S&P 500 and Nasdaq Composite shed 0.5%.
In Tokyo, the Nikkei 225 was up 0.2% in late trade, while Sydney's S&P/ASX 200 ended 0.6% higher. Financial markets in Hong Kong and Shanghai remained closed.
The Federal Reserve Chair Jerome Powell on Wednesday said things are in a "really good place for policy and the economy," stressing there is no rush to make adjustments to policy.
"We do not need to be in a hurry to adjust our policy stance," he told reporters.
Powell said he thought the central bank's policy stance was "very well calibrated" to balance the achievement of its two goals of maximum employment and price stability.
The Fed Chair was speaking after the Federal Reserve left interest rates unchanged highlighting solid economic growth and "somewhat elevated" inflation.
The Federal Open Market Committee's as expected decision leaves the federal funds rate range at 4.25%-4.50%. The vote was unanimous.
The FOMC lowered rates by 25 basis points in December, after cutting at the same pace in November. It had gone big in September with a 50 basis point chop, a move that followed eight successive holds.
XTB analyst Kathleen Brooks commented: "Although all FOMC members voted to remain on hold, we expect that there was robust debate around the outlook for inflation that centred on the strength of the labour market. Powell did mention during the press conference that the committee wanted to see further progress towards inflation, so the next few months' worth of labour market data and CPI will be crucial for financial markets."
The ECB takes centre-stage on Thursday. It announces a decision at 1315 GMT. It is expected to cut by 25 basis points.
DHF Capital analyst Bas Kooijman commented: "The European Central Bank is expected to cut rates by 25 basis points, with further reductions likely if inflation pressures ease and economic growth slows. A dovish tone from ECB President Christine Lagarde could weigh on the euro."
Thursday's global economic docket has US GDP data and weekly initial jobless claims at 1330 GMT.
Thursday's local corporate calendar has full-year results from oil major Shell, and trading statements from telecoms firm BT, mining group Glencore and accountancy software provider, Sage.
In focus in Germany, Deutsche Bank reported a decline in fourth-quarter profit, despite a strong end to the year for its Investment Bank.
Revenue in the three months to December 31 increased 8.5% to EUR7.22 billion from EUR6.66 billion. However, net profit slumped 76% to EUR337 million from EUR1.43 billion. Attributable net profit plunged 92% to EUR106 million from EUR1.26 billion.
Investment Bank revenue alone was 30% higher.
Deutsche Bank reported EUR2.1 billion capital distributions to shareholders have been announced for 2025. It also lifted its 2024 dividend by 50% to EUR0.68 per share from EUR0.45 in 2023.
"Deutsche Bank today announced plans for EUR2.1 billion in further capital distributions to shareholders in 2025. The bank has received supervisory authorization for further share repurchases of EUR750 million so far in 2025," it added.
In addition, the bank said it now expects a cost/income ratio below 65% for 2025, slightly above its original target of "below 62.5%". This reflects "operational efficiencies and additional investments".
A lower cost-to-income ratio would suggest higher profit.
By Eric Cunha, Alliance News news editor
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