12th Feb 2025 06:52
(Alliance News) - London's FTSE 100 is called to edge higher ahead of a US inflation reading and after the Federal Reserve Chair signalled the central bank is in no hurry to cut rates.
IG says futures indicate the FTSE 100 to open 4.8 points higher, 0.1%, at 8,782.19 on Wednesday. The index of London large-caps closed up 9.59 points, 0.1%, at 8,777.39.
Asian stocks traded higher, the pound and euro gained some ground on the dollar, but the yen fell markedly.
The pound was quoted at USD1.2441 early Wednesday, perking up from USD1.2421 at the time of the London equities close on Tuesday. The climbed to USD1.0358 from USD1.0349. Against the yen, the dollar rose to JPY153.65 from JPY152.31.
"The yen is firmly in the spotlight, and not for the right reasons. The double whammy effect is in full swing—soaring US yields are fuelling carry demand, while heightened fears that Japan may get caught in Trump's tariff crosshairs are adding to the pain. The yen was the worst performer among the G-10 currencies on Wednesday as traders repositioned for what could be a rough ride ahead," SPI Asset Management analyst Stephen Innes commented.
Japan asked the US on Wednesday to be exempt from President Donald Trump's tariffs on steel and aluminium exports, Tokyo's top government spokesman said.
Trump has signed executive orders to impose 25% tariffs on imports of steel and aluminium starting March 12, triggering angry reactions internationally including from Canada, Mexico, and the EU.
"We are aware of the presidential order about additional tariffs on steel and aluminium were issued... we have requested to the US government to exclude our country from the measures," Yoshimasa Hayashi told reporters.
The request was made through the Japanese embassy in the US early Wednesday, he said.
Wednesday's data is expected to show the pace of annual US consumer price inflation was unmoved at 2.9% at the start of the year.
The US data is at 1330 GMT.
Meanwhile, Powell repeated the US central bank is in no rush to lower interest rates.
The Federal Reserve chair said in testimony to the Senate Committee on Banking, Housing & Urban Affairs on Tuesday: "With our policy stance now significantly less restrictive than it had been and the economy remaining strong, we do not need to be in a hurry to adjust our policy stance."
The statement comes after the Fed late last month opted to hold the benchmark federal funds target range at 4.25-4.50%.
Analysts don't expect another rate cut until the middle of the year, while some suggest the easing cycle may already be over.
Highlighting the political pressures the Fed are likely to face, Senator Elizabeth Warren urged Powell to make a "meaningful rate cut" next month.
"I urge you to move more rapidly to bring down interest rates, beginning with a meaningful rate cut next month," Warren said.
Speaking before Powell's testimony, Cleveland Fed President Beth Hammack said the Fed has the "luxury of being patient as we assess the path forward for inflation".
In New York, the Dow Jones Industrial Average added 0.3%, the S&P 500 rose marginally while the Nasdaq Composite fell 0.4%.
In Tokyo, the Nikkei 225 added 0.4%. The Hang Seng Index in Hong Kong jumped 2.4%. The Shanghai Composite rose 0.7%. Sydney's S&P/ASX 200 ended 0.6% higher.
A barrel of Brent fell to USD76.71 early Wednesday, from USD76.81 at the London equities close on Tuesday. Gold fell to USD2,888.91 an ounce from USD2,906.30.
In Wednesday's UK corporate calendar, housebuilder Barratt Redrow reports half-year results.
By Eric Cunha, Alliance News news editor
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