30th Dec 2024 06:51
(Alliance News) - Stocks in London are set to open a touch lower on Monday, following declines in New York on Friday and mixed trade in Asia at the start of the week.
Hawkish Federal Reserve interest rate expectations are keeping a lid on equities.
IG says futures indicate the FTSE 100 to open 8.1 points lower, 0.1%, at 8,141.68 on Monday. The index of London large-caps added 12.79 points, 0.2%, at 8,149.78 on Friday. The index is up 5.4% from where it ended in 2023.
Monday is the final full trading day of the year in London. Markets close at 1230 GMT on Tuesday.
The pound was quoted higher at USD1.2586 early Monday, largely flat from USD1.2588 at the time of the London equities close on Friday. The euro was unmoved at USD1.0429. Against the yen, the dollar rose to JPY157.94 from JPY157.50.
A barrel of Brent oil rose to USD73.80 from USD73.62. Gold traded at USD2,622.71 an ounce, climbing from USD2,619.91.
Stocks in Asia were mixed. The Nikkei 225 in Tokyo was down 0.9%. The Shanghai Composite was up 0.3%, while the Hang Seng Index in Hong Kong was 0.1% higher. Sydney's S&P/ASX 200 was down 0.3%.
In New York on Friday, the Dow Jones Industrial Average ended down 0.8%, the S&P 500 shed 1.1% and the Nasdaq Composite fell 1.5%.
"The markets are still digesting the Fed's hawkish message. The Fed Funds futures market has quickly adjusted and is not fully pricing in the next cut until June. Looking ahead, the market is pricing in only around 50% odds of a second cut in H2. The latest dot plots show two cuts next year and so this is one of those rare times when the market is more hawkish than the Fed," Brown Brothers Harriman analysts commented.
Earlier this month, the Fed enacted a 25 basis point rate cut. It brought the target range for the federal funds rate to 4.25% to 4.50%. The US central bank had cut rates by 25bp in November and by 50bp in September.
Chair Jerome Powell in a post-decision press conference stressed the Fed was still on track to cut rates in 2025, although further progress on inflation would be required.
"Inflation has once again underperformed relative to expectations...we really want to see progress," he said at the time.
Monday's economic events calendar has the Dallas Fed manufacturing index in the US at 1530 GMT.
By Eric Cunha, Alliance News news editor
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