15th Oct 2025 06:57
(Alliance News) - Stocks in London are set to open higher on Wednesday, shaking off trade war fears, before corporate earnings continue to pile in, with Bank of America and Morgan Stanley continuing the reporting season for major US banks.
IG says futures indicate the FTSE 100 to open 37.9 points higher, 0.4%, at 9,490.67 on Wednesday. The index of London large-caps edged up 9.90 points, 0.1% at 9,452.77 on Tuesday.
Sterling rose to USD1.3356 on Wednesday morning, from USD1.3294 at the time of the London equities close on Tuesday. The euro climbed to USD1.1625 from USD1.1591. Against the yen, the dollar retreated to JPY151.16 from JPY151.83.
The yield on the 10-year US Treasury narrowed to 4.01% from 4.05%. The 30-year yield slimmed to 4.62% from 4.64%.
Federal Reserve Chair Jerome Powell warned that the risks to employment have risen in recent months, noting a sharp slowdown in job creation.
"While the unemployment rate remained low through August, payroll gains have slowed sharply, likely in part due to a decline in labour force growth due to lower immigration and labour force participation," he told a conference in Philadelphia, according to prepared remarks.
Powell also hinted that the Fed could soon stop reducing the size of its balance sheet, which ballooned in the early days of the Covid-19 pandemic as the US central bank piled into Treasuries and mortgage-backed securities to support the economy.
"Our long-stated plan is to stop balance sheet runoff when reserves are somewhat above the level we judge consistent with ample reserve conditions," he said. "We may approach that point in coming months."
In New York on Tuesday, the Dow Jones Industrial Average rose 0.4%, but the S&P 500 shed 0.2% and the Nasdaq Composite fell 0.8%.
"The trigger for yesterday's shakiness? Seemingly, a renewed bout of relatively punchy rhetoric from China, who have begun a probe into the impacts of various US maritime curbs," Pepperstone analyst Michael Brown commented.
"Nevertheless, trade on Tuesday probably gave us a decent taste of how things may pan out over the next couple of weeks, with the market continuing to gyrate significantly on whatever the 'headline du jour' may be, with those simmering tensions continuing to cloud the outlook for the time being."
In focus on Wednesday, the US corporate earnings season continues. Bank of America and Morgan Stanley report third quarter numbers, hot-on-the-heels of banking peers, on Tuesday.
Wednesday's UK corporate calendar has a trading statement from recruiter PageGroup and bingo and casino operator Rank.
Wednesday's global economic diary has eurozone industrial production figures and the US Beige Book.
Out overnight, China's consumer and producer prices continued to decline on an annual basis in September, data from the National Bureau of Statistics of China showed Wednesday.
The national consumer price index, a key gauge of inflation, fell 0.3% year-on-year in September, easing slightly from a 0.4% drop in August, but exceeding the FXStreet-cited consensus forecast of a 0.1% decline.
"Every sector, from steel to solar panels, is trapped in a price war so relentless it feels like the corporate equivalent of trench warfare — companies undercutting each other just to live to fight another day," commented Stephen Innes, managing partner at SPI Asset Management.
On a month-on-month basis, consumer prices rose 0.1%, up from a flat reading in August, but still lower than the expected 0.2% increase.
Meanwhile, the producer price index matched market expectations, declining 2.3% year-on-year in September, the pace of deflation abating from 2.9% in August.
In China, the Shanghai Composite rose 0.6%, while the Hang Seng Index in Hong Kong was up 1.5%. Tokyo's Nikkei 225 shot up 1.7%, while the S&P/ASX 200 added 1.0%.
A barrel of Brent rose to USD62.16 on Wednesday morning from USD61.87 late Tuesday. Gold rose to USD4,187.13 an ounce, from USD4,141.29.
"Oil prices fell to their lowest point in five months on Tuesday, extending their downward trend. Mounting concerns of a global supply surplus weighed on the market, compounded by renewed trade tensions between the US and China," Sky Links Capital Group analyst Daniel Takieddine commented.
By Eric Cunha, Alliance News news editor
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