7th May 2025 06:53
(Alliance News) - Stocks in London are set to open slightly lower on Wednesday, putting the FTSE 100's win streak under threat, ahead of a Federal Reserve decision later.
IG says futures indicate the FTSE 100 to open 8.6 points lower, 0.1%, at 8,588.82 on Wednesday. The index of London large-caps ended up just 1.07 points at 8,597.42 on Tuesday.
It has risen for 16 days in a row.
Against the dollar, the pound fell to USD1.3352 on Wednesday morning from USD1.3368 at the time of the London equities close on Tuesday. The euro, however, perked up to USD1.1355 from USD1.1348. Versus the yen, the dollar rose to JPY143.12 from JPY142.86.
In New York on Tuesday, the Dow Jones Industrial Average fell 1.0%, the S&P 500 gave back 0.8% and the Nasdaq Composite lost 0.9%.
Financial markets in Tokyo re-opened. The Nikkei 225 was up 0.1% in late trade. The Shanghai Composite was 0.6% higher, while the Hang Seng Index in Hong Kong added 0.8%. In Sydney, the S&P/ASX 200 rose 0.4%.
"Risk appetite remained subdued yesterday, as stocks lost ground once more, amid de-risking and position squaring ahead of the FOMC decision later today," Pepperstone analyst Michael Brown commented.
"It feels like the week hasn't really got going yet, which I suppose isn't much of a surprise given the plethora of public holidays we've just come through, and ahead of a busy slate of central bank decisions over the next day or so."
Brown continued: "All eyes on the FOMC, today, though Powell & Co are near-certain to stand pat, maintaining the target range for the fed funds rate at 4.25% to 4.50%."
China on Wednesday eased key monetary policy tools in a bid to boost its ailing economy as it struggles with the effects of weak consumption and the trade war with the US.
The country's leaders are battling to reignite growth, which has not fully recovered since the Covid-19 pandemic, crippled by sluggish domestic demand and a protracted property sector crisis.
That has been compounded by a punishing trade war that has seen US President Donald Trump impose tariffs reaching 145% on many Chinese products and Beijing retaliate with 125% duties on imports from the US.
On Wednesday, the head of China's central bank told a news conference that Beijing would cut a key interest rate and lower the amount banks must hold in reserve in order to boost lending.
"The reserve requirement ratio will be cut by 0.5 percentage points," Pan Gongsheng said, adding that it will also lower its seven-day reverse repurchase rate to 1.4% from 1.5%.
The UK and the US are close to agreeing a trade pact that would cushion the impact of Donald Trump’s "liberation day" tariffs by granting lower-tariff quotas for UK steel and car exports, the Financial Times on Tuesday said.
Citing officials in London and Washington, the FT said the deal, set to be signed this week, is due to include quotas that spare some UK exports from the full brunt of the additional 25% tariffs that Trump levied on steel and car imports in February and March.
UK trade negotiators returned to Washington this week for the final stages of negotiations, which one senior UK official told the FT were continuing "at speed", cautioning that disagreements remain over pharmaceuticals.
As well as offering quotas for UK exports, the UK is also hoping to secure reductions in the sector specific 25% tariffs that Trump has levied on steel and cars.
A barrel of Brent traded at USD62.60 early Wednesday, barely budging from USD62.58 late Tuesday. Gold fell to USD3,387.39 an ounce from USD3,396.32.
Wednesday's economic calendar has the US interest rate decision and eurozone retail sales data.
Wednesday's local corporate calendar has first-quarter results from bookmaker Flutter Entertainment.
By Eric Cunha, Alliance News news editor
Comments and questions to [email protected]
Copyright 2025 Alliance News Ltd. All Rights Reserved.