17th Sep 2025 06:54
(Alliance News) - Stocks in London are set to open a touch higher on Wednesday, ahead of an expected Federal Reserve rate cut, with eyes also on a UK inflation reading on the eve of the next Bank of England decision.
IG says futures indicate the FTSE 100 to open 8.0 points higher, 0.1%, at 9,203.66 on Wednesday. The index of London large-caps closed down 81.37 points, 0.9%, at 9,195.66 on Tuesday.
In New York on Tuesday, the Dow Jones Industrial Average fell 0.3%, while the S&P 500 and Nasdaq Composite each lost 0.1%.
"The underlying upward trajectory has not vanished but has instead run into the barrier of anticipation particularly around the Fed's decision and the updated summary of economic projections SEP. Short-term trading sentiment remains cautious, but markets have not shown fundamental weakness. The resilience suggests confidence that [Fed Chair Jerome Powell] will deliver a dovish tone. The near-term risk, however, lies in the extent of that dovishness as markets have priced a deep easing path, leaving them vulnerable to disappointment if the Fed underdelivers," Pepperstone analyst Ahmad Assiri commented.
The yield on the US 10-year Treasury was quoted at 4.03% on Wednesday morning, easing from 4.05% at the time of the London equities close on Tuesday. The yield on the US 30-year Treasury was quoted at 4.64%, narrowing from 4.66%.
Sterling bought USD1.3646 against the dollar early Monday, up slightly from USD1.3642 at the time of the London equities close on Tuesday. The euro advanced to USD1.1856 from USD1.1837, while against the yen, the dollar eased to JPY146.47 from JPY146.65.
An ounce of gold fell to USD3,678.21 an ounce from USD3,680.32, while Brent was largely unmoved at USD68.31 compared to USD68.32. Gold hit another record high on Tuesday, topping the USD3,700 an ounce mark.
Wednesday's economic calendar has the Fed decision at 1900 BST, after a UK inflation reading at 0700 and eurozone consumer price index data at 1000.
According to consensus cited by FXStreet, the pace of UK consumer price inflation is expected to have picked up to 3.9% in August, from 3.8% in July.
Commerzbank analyst Michael Pfister commented: "Yesterday's British labour market data had no impact on the pound, with the figures largely in line with expectations. Today's inflation figures are likely to be similar. Although a surprise cannot be ruled out, the fundamental picture of persistent inflation is unlikely to change. Price pressure has simply remained too high for too long."
According to the Office for National Statistics on Tuesday, the UK's jobless rate was steady at 4.7% in the three months to July, where it stood for the three months to June. The reading was in line with consensus cited by FXStreet.
In Tokyo on Wednesday, the Nikkei 225 traded 0.3% lower. In China, the Shanghai Composite was up 0.3%, while the Hang Seng Index in Hong Kong surged 1.7%. In Sydney, the S&P/ASX 200 was down 0.7%.
Wednesday's local corporate calendar has annual results from housebuilder Barratt Redrow, while greeting card and gifting firm Moonpig Group releases a trading statement.
By Eric Cunha, Alliance News news editor
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