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LONDON MARKET EARLY CALL: FTSE 100 set to climb amid US-EU deal hope

10th Jul 2025 06:54

(Alliance News) - Stocks in London are set to open higher on Thursday, leaving the FTSE 100 on the cusp of a record high, despite lingering tariff uncertainty,

IG says futures indicate the FTSE 100 to open 33.1 points higher, 0.4%, at 8,900.12 on Thursday. The index of London large-caps closed up 12.84 points, 0.2%, at 8,867.02 on Wednesday.

The CAC 40 in Paris is called up 0.2%, while the DAX 40 in Frankfurt is set to open 0.1% higher.

Hope of a US-EU trade deal has support European equities. The EU wants to strike a deal with the US "in the coming days" to avoid sweeping tariffs, a spokesman said Wednesday.

An opening price of 8,900 points could leave the FTSE 100 on the cusp of a new record high. Its best-ever level of 8,908.82 points was achieved in March. Its closing high of 8,884.92 points was set around this time last month.

The pound was quoted at USD1.3609 early Thursday, rising from USD1.3583 at the time of the London equities close on Wednesday. The euro stood at USD1.1740, climbing from USD1.1706. Against the yen, the dollar was trading lower at JPY146.20 from JPY146.53.

In Tokyo on Thursday, the Nikkei 225 was down 0.7%. In China, the Shanghai Composite was up 0.7%, while the Hang Seng Index in Hong Kong traded 0.4% higher. In Sydney, the S&P/ASX 200 was up 0.6% in late dealings.

President Donald Trump announced Wednesday that a 50% tariff on US imports of copper, a key metal for green energy and other technologies, will take effect on August 1.

"I am announcing a 50% TARIFF on Copper, effective August 1, 2025, after receiving a robust NATIONAL SECURITY ASSESSMENT," Trump posted on his Truth Social platform, likely alluding to a Department of Commerce investigation launched earlier this year.

Trump announced plans Wednesday to slap a 50% US tariff on Brazilian goods starting August 1, blasting the trial of the country's ex-leader Jair Bolsonaro as a "Witch Hunt."

In a letter addressed to President Luiz Inacio Lula da Silva, Trump criticised the treatment of Bolsonaro as an "international disgrace," adding that the trial "should not be taking place."

In addition, Trump released a fresh set of letters to trading partners Wednesday, setting out tariff rates for six countries as Washington pushes to bring about a flurry of trade deals officials have promised.

The letters, addressed to leaders of economies including the Philippines, Brunei, Algeria, Libya and Iraq, spelled out duties ranging from 20% to 30%.

The yield on the US 10-year Treasury was quoted at 4.33% early Thursday UK time, slimming from 4.38% at the time of the London equities close on Wednesday. The yield on the US 30-year Treasury was quoted at 4.88%, easing from 4.91%.

In New York on Wednesday, the Dow Jones Industrial Average ended up 0.5%, the S&P 500 rose 0.6% and the Nasdaq Composite climbed 0.9%.

Minutes from the Federal Open Market Committee's June meeting showed policymakers believed tariff risks had moderated since its rate decision in May, but "considerable uncertainty" remains as to the timing and extent of their impact.

"While a few participants noted that tariffs would lead to a one-time increase in prices and would not affect longer-term inflation expectations, most participants noted the risk that tariffs could have more persistent effects on inflation, and some highlighted the fact that such persistence could also affect inflation expectations," the minutes noted.

However, the committee said "uncertainty had diminished" since the previous meeting, due to easing trade tensions.

Meeting minutes showed most Fed officials are disposed to cut rates this year, "noting that upward pressure on inflation from tariffs may be temporary or modest, that medium- and longer-term inflation expectations had remained well anchored, or that some weakening of economic activity and labour market conditions could occur."

Oxford Economics analyst Nancy Vanden Houten commented: "The minutes from the mid-June FOMC meeting leave us comfortable with our baseline forecast for the Fed to hold off on cutting rates until December.

"Officials saw the economy and labor market as healthy enough to withstand an extended period of steady policy as the FOMC assesses the impact of tariffs on inflation, and we don't think recent data have altered that view. Many FOMC members thought it could take some time for the full impact of tariffs to be reflected in prices."

A barrel of Brent oil fetched at USD70.24 early Thursday, edging down from USD70.30 at the time of the London equities close on Wednesday. Gold was quoted at USD3,322.61 an ounce, rising from USD3,308.72.

On Thursday's economic calendar, there is a US initial jobless claims reading at 0700 BST.

On Thursday's UK corporate calendar water utility Severn Trent releases a trading update.

By Eric Cunha, Alliance News news editor

Comments and questions to [email protected]

Copyright 2025 Alliance News Ltd. All Rights Reserved.

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