27th Jan 2025 06:49
(Alliance News) - European equities are called to open lower on Monday, at the start of a week stacked with rate decisions, and as investors continue to look ahead to what Donald Trump's US administration will bring.
IG says futures indicate the FTSE 100 to open 61.5 points lower, 0.7%, at 8,440.85 on Monday. The index of London large-caps closed down 62.85 points, 0.7%, at 8,502.35 on Friday.
The CAC 40 in Paris is called down 1.2% and the DAX 40 in Frankfurt 0.8% lower.
Sterling faded to USD1.2459 early Monday, from USD1.2490 at the time of the London equities close on Friday. The euro fell to USD1.0462 from USD1.0510. Against the yen, the dollar perked up to JPY156.10 from JPY155.70.
A barrel of Brent fetched USD76.94, down from USD77.35. Gold faded to USD2,752.91 an ounce from USD2,774.82.
In Asia, on Monday, the Shanghai Composite was 0.3% higher before markets there are closed for over a week for the Chinese New Year holiday period. The Hang Seng Index in Hong Kong was up 0.9%. Financial markets in Hong Kong have an abbreviated trading day on Tuesday, before being closed for the rest of the week.
In Tokyo, the Nikkei 225 was down 0.9% in late trade on Monday. Financial markets in Sydney are closed for Australia Day.
In New York on Friday, the Dow Jones Industrial Average and S&P 500 lost 0.3%, while the Nasdaq Composite shed 0.5%.
"President Trump's first week in office left market participants largely unperturbed, though the week ahead brings not only another spell of headline-watching, but also a busy calendar of policy decisions, and corporate earnings," Pepperstone analyst Michael Brown commented.
The Bank of Canada and US Federal Reserve announce rate decisions on Wednesday, before the European Central Bank on Thursday.
Brown continued: "The Federal Open Market Committee are set to hold the target range for the fed funds rate steady at 4.25% - 4.50%, 'skipping' the January meeting to take stock of the impact of the 100bp of cuts delivered last year, and also to assess how President Trump's initial policy moves may impact the economic outlook. Of course, the resilient nature of the US labour market, as well as continued albeit bumpy disinflationary progress, has given policymakers the flexibility to stand pat for now.
"In contrast, the ECB show no sign of pausing the easing cycle any time soon, nor can they afford to, as downside growth risks continue to mount, political uncertainty remains rife in both France and Germany, and as the probability of inflation undershooting the 2% target grows. [ECB President Christine] Lagarde & Co, hence, will deliver a 25bp cut this week."
Keir Starmer and Donald Trump discussed the importance of "close and warm ties" between Britain and the US and agreed to meet "soon" in their first call since the inauguration, Downing Street said.
The talks, which lasted 45 minutes, come hours after the US president heaped praise on the prime minister for having done what he described as "a very good job thus far."
In a readout of the conversation, Number 10 said Trump had opened by sending his condolences to Starmer after the death of his brother Nick, who had cancer and died on Boxing Day.
Starmer thanked him for his kind words and "congratulated him on his inauguration", Downing Street said.
Meanwhile, a spat between the US and Colombia was in focus over the weekend.
Colombia on Sunday backed down and agreed to accept deported citizens sent on US military aircraft, hours after President Trump threatened painful tariffs to punish the defiance to his mass deportation plans.
Colombia's leftist president, Gustavo Petro, had earlier said he would only take back citizens "with dignity," such as on civilian planes, and had turned back two US military aircraft with repatriated Colombians.
Trump, less than a week back in office, responded furiously and threatened sanctions of 25% that would quickly scale up to 50% against Latin America's fourth largest economy.
In UK corporate news over the weekend, WH Smith said it is in talks to sell its high street arm.
The retailer's high street operation is made up of about 500 stores, the first of which was opened 230 years ago.
"WH Smith confirms that it is exploring potential strategic options for this profitable and cash generative part of the group, including a possible sale," a statement said.
Over the past decade, the firm has focused on its more fruitful, travel retail business which operates from airports, train stations and hospitals.
The high street business now accounts for only about 15% of annual group trading profit.
Monday's UK company events calendar has a third-quarter trading statement from boot maker Dr Martens.
By Eric Cunha, Alliance News news editor
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