18th Mar 2025 06:48
(Alliance News) - Stocks in London are set to open higher on Tuesday, the eve of Federal Reserve and Bank of Japan rate calls, with a slew of central bank decisions following as the week progresses.
Eyes remained on commodity prices also, with gold back above USD3,000 and Brent rising.
IG says futures indicate the FTSE 100 to open 30.1 points higher, 0.4%, at 8,710.39 on Tuesday. The index of London large-caps closed up 47.96 points, 0.6%, at 8,680.29 on Monday.
"A positive start to the week in terms of risk sentiment, yesterday, though it did rather feel like the 'calm before the storm' given the bumper docket we have ahead," Pepperstone analyst Michael Brown commented.
"That includes, of course, the Trump-Putin call today, as well as five G10 central bank decisions, plus earnings from the likes of Micron and FedEx, in addition to a fairly busy data docket. On top of all that, the threat of Trump tape bombs continues to loom large."
In New York on Monday, the Dow Jones Industrial Average traded 0.9% higher, the S&P 500 rose 0.6% and the Nasdaq Composite added 0.3%.
Tuesday's economic calendar has US industrial production data at 1315 GMT, after a eurozone trade balance reading at 1000 GMT.
The pound faded to USD1.2969 early Tuesday, from USD1.2987 at the time of the London equities close on Monday. The euro fell to USD1.0906 from USD1.0922. Against the yen, the dollar advanced to JPY149.87 from JPY148.57.
In China, the Shanghai Composite was up 0.1%, while the Hang Seng Index in Hong Kong jumped 2.0%. The Nikkei 225 in Tokyo rose 1.3% and the S&P/ASX 200 in Sydney edged up 0.1%.
"Renewed confidence in Beijing's latest consumption stimulus plan kept risk appetite elevated. Japanese equities led the charge, capitalising on a weaker yen, while broader sentiment remained upbeat despite lingering tariff concerns. Investors appear content to throw caution to the wind, betting that Xi and company have done just enough to cushion the impact of potential new US trade measures," SPI Asset Management analyst Stephen Innes commented.
"Japan is fast becoming one of the most compelling macro trades on the board. The Bank of Japan is walking a tightrope, determined to normalise policy after decades of ultra-loose conditions. Unlike in the past, this time, they've got real firepower—Japanese wages are now outpacing US wages at the fastest rate in decades, giving the BoJ the green light to tighten."
Innes continued: "The bond market isn't waiting around. Long-term Japanese government bond yields are ripping higher, with the 40-year JGB yield knocking on the door of 3%, hitting fresh multi-year highs almost daily.
"But not all is smooth sailing. Higher domestic yields, global market turbulence, and trade war uncertainties are starting to bite, with Japan's economic surprises index tumbling to its lowest level since January. That's put the market in wait-and-see mode, with traders betting the BoJ stays on hold this week while money markets fully price in a 25-basis-point hike for June or July."
After the BoJ decision early Wednesday, the Fed follows later that day.
A barrel of Brent rose to USD71.44 early Tuesday, from USD71.04 at the time of the closing bell in London on Monday. Gold rose to USD3,013.11 an ounce from USD2,995.90. It had hit another record high above USD3,017.
XS.com analyst Linh Tran commented: "Geopolitical tensions in the Middle East continue to escalate, with conflicts showing no signs of de-escalation. Yesterday, the Israel-Hamas conflict intensified dramatically as Israel launched large-scale airstrikes on Gaza, resulting in at least 200 casualties, including many children, women, and the elderly. These tensions, combined with the escalating US-China trade conflict, have driven investors toward gold as a safe investment channel. These uncertainties have not only increased demand for gold but have also pushed significant capital inflows into the precious metals market, contributing to gold reaching record-high prices."
Tuesday's UK corporate calendar has half-year results from Close Brothers and full-year results from Computacenter.
By Eric Cunha, Alliance News news editor
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