20th Jan 2026 06:57
(Alliance News) - Stocks in London are set to open lower on Tuesday, as investors continue to mull US President Donald Trump's tariff threats against Europe, and ahead of UK unemployment data which is due shortly.
IG says futures indicate the FTSE 100 to open down 48.5 points, 0.5%, at 10,146.85 on Tuesday. The index of London large-caps closed down 39.94 points, 0.4%, at 10,195.35 on Monday.
Sterling was at USD1.3433 on Tuesday morning, up from USD1.3428 at the London equities close on Monday. The euro was higher at USD1.1664 from USD1.1643. Against the yen, the dollar was higher at JPY158.45 versus JPY158.11.
US Treasury Secretary Scott Bessent warned European nations against retaliatory tariffs over President Donald Trump's threatened levies to obtain control of Greenland.
"I think it would be very unwise," Bessent told reporters on the first day of the World Economic Forum. He said Trump wanted control of the autonomous Danish territory because he considers it a "strategic asset" and "we are not going to outsource our hemispheric security to anyone else".
Pepperstone analyst Michael Brown said the European market reaction to Trump's tariffs threats was "predictable" and "contained" on Monday, as it was "not especially sizeable or violent in nature, at least not compared to some of the risk-off moves that we saw on the back of tariff threats last year".
"That latter point, to my mind, speaks to the market's belief that what we're seeing in terms of President Trump's rhetoric is very much a negotiating gambit, aimed at obtaining leverage in negotiations, as opposed to a serious policy proposal that the [administration] are likely to follow-through on. This also remains my working assumption, that what we're again seeing here is the 'escalate to de-escalate' strategy panning out meaning that, sooner or later, some sort of 'deal' will be agreed, an off-ramp will be taken, and a U-turn will be pulled on the trade front in due course," Brown added.
US financial markets were closed on Monday for Martin Luther King Jr Day. They will reopen later on Tuesday, for the first time since US President Donald Trump threatened tariffs against several European nations.
Meanwhile, China's central bank left its key lending rates unchanged in January as expected.
The People's Bank of China kept its one-year loan prime rate at 3.0% and the five-year LPR at 3.5% for an eighth straight month, in line with the consensus forecast cited by FXStreet.
In Asia on Tuesday, the Nikkei 225 in Tokyo was down 1.1%. In China, the Shanghai Composite was 0.1% lower, while the Hang Seng Index in Hong Kong lost 0.2%. The S&P/ASX 200 in Sydney was 0.7% lower.
The UK will reimburse visa fees and fast-track applications for top international firms under plans to be announced by Chancellor Rachel Reeves.
In a speech at the WEF gathering in the Swiss Alps, Reeves is expected to unveil incentives for global companies in artificial intelligence, life sciences and sustainable energy industries as part of her push for growth.
Under the proposals, visa fees will be reimbursed for "select trailblazers in deep tech sectors" and workers joining UK companies in these "priority sectors", the Treasury said.
Overnight, BHP raised its annual copper guidance after reporting mixed production results for the second quarter of financial year 2026, while also confirming significant cost increases for its Jansen potash project in Canada.
The Melbourne, Australia-based diversified miner said copper production in the three months ended December 31 fell 4.0% to 490,500 tonnes from 510,800 tonnes in the same quarter a year earlier.
Iron ore production increased 5.3% to 69.7 million tonnes from 66.2 million tonnes over the same period. Steelmaking coal production fell 3.1% to 4.3 million tonnes from 4.4 million tonnes, whereas energy coal production surged 25% to 4.6 million tonnes from 3.7 million tonnes.
In light of recent operational performance, BHP has lifted its copper production guidance for the full-year ending June 30 to 1.9 million to 2.0 million tonnes from a previous range of 1.8 million to 2.0 million tonnes.
BHP also confirmed that the total investment for Jansen stage one will now increase to USD8.4 billion, including contingencies, up from the previous cost estimate issued in July of USD7.0 billion to USD7.4 billion.
Gold was sharply higher at USD4,710.60 an ounce early on Tuesday from USD4,671.76 late Monday.
Earlier on Tuesday, gold hit a new record of USD4,717.18.
Brent oil was trading lower at USD63.93 a barrel from USD64.13.
Tuesday's UK corporate calendar has a trading statement from furniture retailer DFS, defence manufacturer Qinetiq Group and infrastructure services company Kier Group.
Tuesday's global economic calendar sees UK unemployment and average earnings data at 0700 GMT, at the same time as German producer price index inflation, followed by eurozone balance of payments figures.
By Michael Hennessey, Alliance News reporter
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