17th Jul 2015 06:03
LONDON (Alliance News) - The FTSE 100 is called to start lower Friday, falling back slightly from the gains it made on Thursday on the back of several positive developments in the Greek debt situation.
IG says futures indicate the FTSE 100 to open down at 6,789.8. The index closed up 0.6% at 6,796.45 on Thursday.
Late Wednesday, the harsh bailout terms for the country's third bailout were approved by Greek parliament before the European Central Bank on Thursday raised its emergency liquidity assistance for the country's banks and the Eurogroup agreed in principle to provide EUR7 billion bridge loan to Athens. More details are expected to be provided on the bridging loans on Friday.
Following the ECB's decision to raise ELA by EUR900 million for a week, Greek banks are set to open again for the first time in three weeks. Since late June, Greece has had a bank holiday, with the daily withdrawal limit at ATMs set at EUR60 a day. Despite banks set for opening Monday, it is likely that the cash withdrawals limit will only be eased gradually.
Deputy Finance Minister Dimitris Mardas said: "From Monday, the services offered will be widened. All the banks everywhere will be open. There might be a weekly limit on withdrawals, rather than a daily one. This is a proposal we are processing and we think it's technically possible."
Bank of England Governor Mark Carney hinted that the central bank will start to consider changing its UK interest rate policy at end of 2015, but said that any increases would be slow and suggested that interest rates would rise to no more than 2.25% in the medium term.
Speaking at Lincoln Cathedral in a speech about the Magna Carta and the Bank of England, Carney said the decision on when to start the process of raising interest rates in the UK, from the current 0.5% rate, "will likely come into sharper relief around the turn of this year".
"It would not seem unreasonable to me to expect that once normalisation begins, interest rate increases would proceed slowly and rise to a level in the medium term that is perhaps about half as high as historical averages," Carney said, indicating rates will rise to around 2.25%.
On Wall Street Thursday, the DJIA closed up 0.4% and the S&P 500 up 0.8%. The Nasdaq Composite closed up 1.3% at a new record high closing level of 5,163.1837.
In Asia Friday, the Nikkei is up 0.2%, the Hang Seng trades up 1.2% and the Shanghai Composite is up 2.2%.
In the UK corporate calendar, there are second-quarter results from miner Evraz and a first-quarter trading update from currency manager Record.
In the economic calendar, there are US inflation data at 1330 BST alongside housing starts and building permits. At 1500 BST there is the Reuters/Michigan consumer sentiment index.
By Neil Thakrar; [email protected]; @NeilThakrar1
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