8th Sep 2026 06:56
(Alliance News) - Stocks in London are set to tread water on Tuesday, after listless trade on Monday, as markets await fresh catalysts in the form of Thursday's European Central Bank decision and Friday's US inflation reading.
Tuesday also sees traders in New York return to desks, after the Labor Day holiday on Monday.
IG says futures indicate the FTSE 100 to open just 2.4 points lower at 10,819.73 on Tuesday. The index of London large-caps closed down 8.96 points, 0.1% at 10,822.13 on Monday.
Sterling traded at USD1.3538 on Tuesday morning, rising from USD1.3516 at the time of the London equities close on Monday. Versus the euro, it fell to EUR1.1624 from EUR1.1638.
The single currency traded at USD1.1642, rising from USD1.1629. Against the yen, the dollar declined to JPY153.53 from JPY154.33. It traded as low as JPY152.89 on Tuesday.
"The market has changed its mind about the yen. For much of the summer, bullish USD/JPY was one of the easiest chairs in the room. Carry worked, the Bank of Japan moved carefully and every yen rally looked temporary. Now traders have come back and found the furniture rearranged. Markets are increasingly pricing a firmer BOJ tightening path, while talk of Japanese portfolio repatriation has given the move another source of fuel," Quintex Intel analyst Stephen Innes commented.
"A lot of good yen news is already priced into the trade: a more aggressive BoJ, domestic capital reshoring, less attractive yen-funded carry, and perhaps greater political tolerance for yen strength. That is a lot of expectation riding on one horse. Unless there is more going on behind the scenes between Washington and Tokyo than has been publicly acknowledged, the easy part of the yen move may already be behind us."
On an annualised basis, Japan's economy grew 1.4% in the second quarter of 2026, data on Tuesday, showed, topping a preliminary estimate of a 1.1% rise.
The yield on the US 10-year Treasury was quoted at 4.79%, widening slightly from 4.78% at the time of the London equities close on Friday. The yield on the US 30-year Treasury widened to 5.25% from 5.24%.
Financial markets in New York were closed on Monday, but reopen Tuesday.
In Tokyo, the Nikkei 225 was down 0.2%. In China, the Shanghai Composite was up 0.3%, while the Hang Seng Index in Hong Kong was down 0.4%. In Sydney, the S&P/ASX 200 was down 1.0%.
China's trade surplus increased in August, official data showed Tuesday.
According to figures from the General Administration of Customs, China's trade balance surplus stood at USD119.09 billion in August, increasing from USD112.50 billion in July.
The latest reading slightly missed the USD119.10 billion consensus forecast cited by FXStreet.
Exports rose 25% in August, matching the consensus forecast and accelerating from 24% in July. Imports surged 28.2%, up from 27.5% previously but below the 30% consensus estimate.
ING analysts commented: "China posted faster export and import growth in August, powered by tech goods. While the product breakdown looks ever more lopsided, the geographic picture is smoothing out as the US slump recedes and demand across other markets remain firm."
An ounce of gold edged up to USD4,423.81 on Tuesday from USD4,412.10 at the time of the London equities close on Monday. A barrel of Brent fetched USD98.00, up from USD97.89.
UK Prime Minister Andy Burnham and US President Donald Trump have agreed the need to "continue working towards a ceasefire that prevented more loss of life" in Ukraine, Downing Street said.
It comes after US envoys held talks in Kyiv on Sunday during an official visit to the country as part of an effort to end the conflict with Russia.
Prime Minister Burnham spoke to Trump on Monday afternoon.
A Downing Street spokesperson said: "On Ukraine, the two leaders agreed on the need to continue working towards a ceasefire that prevented more loss of life.
"The prime minister reiterated the UK's support for Ukraine and for recent US-led peace negotiations.
"On the Middle East, the prime minister set out the UK's commitment to working towards peace and security in the region, stressing the importance of the two-state solution, the reopening of the Strait of Hormuz, and ensuring that Iran never acquires a nuclear weapon."
On the UK corporate calendar on Tuesday, homewares seller Dunelm Group reports full-year results.
There is German trade data at 0700 BST.
By Eric Cunha, Alliance News news editor
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