31st Jan 2025 07:00
(Alliance News) - The FTSE 100 is called to open higher on Friday, shaking off a lingering US tariff threat, while gold spiked to a record high.
IG says futures indicate the FTSE 100 to open 15.8 points higher, 0.2%, at 8,662.68 on Friday. The index of London large-caps ended up 89.07 points, 1.0%, at 8,646.88 on Thursday.
In Tokyo on Friday, the Nikkei 225 was up 0.4% in late trade. The S&P/ASX 200 in Sydney had risen 0.5%. Financial markets in Hong Kong and Shanghai remained closed.
In New York on Thursday, the Dow Jones Industrial Average added 0.4%, the S&P 500 rose 0.5% and the Nasdaq Composite ended 0.3% higher.
Apple rose 3.0% after hours.
In its three months to December 31, the Cupertino, California-based technology company said net income improved 7.1% to USD36.33 billion from USD33.92 billion a year prior. Basic earnings per share was USD2.41 compared to USD2.19 in the fourth quarter of 2023.
First quarter sales rose 3.9% to USD124.30 billion from USD119.58 billion, ahead of LSEG consensus of USD124.12 billion.
The pound slipped to USD1.2429 on Friday morning, from USD1.2461 at the time of the London equities close on Thursday. The euro slipped to USD1.0394 from USD1.0423. Against the yen, the dollar bought JPY154.70, up from JPY154.37.
The European Central Bank on Thursday lowered interest rates by 25 basis points following data that showed the eurozone economy ground to a halt in the three months to December.
The quarter-point cut, which was as expected, took the interest rates on the deposit facility, the main refinancing operations and the marginal lending facility to 2.75%, 2.90% and 3.15% respectively.
"Yesterday's ECB decision and the subsequent press conference with ECB President Christine Lagarde did not bring any major surprises. Interest rates were cut by [a quarter] percentage point as expected, and Lagarde also described the new interest rate level as restrictive, making it clear that further interest rate cuts are likely to follow soon. But that had already been priced in. So there was no fundamental impetus from the euro side," Commerzbank analyst Ulrich Leuchtmann commented.
A barrel of Brent fell to USD76.26 early Friday from USD77.18 at the time of the London equities close on Thursday. An ounce of gold rose to USD2,794.27 from USD2,793.57. Gold rose as high as USD2,799.86 on Friday, its best level.
"Gold continues to glimmer, with the yellow metal having rallied to fresh record highs yesterday, surpassing the prior peak set last October. Not only is momentum still firmly with the bulls, supportive EM central bank flows, coupled with lingering haven demand amid ongoing political and geopolitical uncertainties leaves the balance of risks tilting firmly towards further gains," Pepperstone analyst Michael Brown commented.
The price of gold hit a new record, lifted by uncertainty over the economic policies of US President Donald Trump and the dollar's weakness following a disappointing US growth report.
Economic growth in the US slowed by more than expected in the final quarter of 2024, an advance estimate published by the Bureau of Economic Analysis showed Thursday.
Real gross domestic product grew quarter-on-quarter on an annualised basis by 2.3% in the final three months of 2024. Growth eased from a 3.1% surge in the third quarter, and underperformed against the FXStreet-cited market consensus, which had anticipated a milder slowdown in annualised growth to 2.6%.
On a year-on-year basis, gross domestic product growth abated to 2.5% in the fourth-quarter, from 2.7% in the third. It was the weakest pace of on-year GDP growth since the first-quarter of 2023.
Trump reiterated Thursday his threat to place 100% tariffs on Brics nations, as the deadline loomed for him to impose tariffs on Canada and Mexico.
Trump had previously threatened 100% tariffs on Brics nations – a bloc including Brazil, Russia, India, China and South Africa – if they create a rival to the US dollar, which he doubled down on Thursday night.
"The idea that the Brics countries are trying to move away from the dollar, while we stand by and watch, is over," he posted on his Truth Social platform.
"We are going to require a commitment from these seemingly hostile countries that they will neither create a new Brics currency, nor back any other currency to replace the mighty US dollar or, they will face 100% tariffs," he continued.
Trump's comments on possible Brics tariffs came days before a February 1 deadline he set shortly after taking office whereupon he would place 25% tariffs on neighbours Canada and Mexico unless they cracked down on illegal migrants crossing the US border and the flow of deadly fentanyl.
Friday's global economic calendar sees US personal consumption expenditures price index and employment cost index data at 1330 GMT.
By Eric Cunha, Alliance News news editor
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