28th Mar 2025 06:47
(Alliance News) - Stocks in London are set to open higher on Friday after softening on Thursday in the wake of new US tariffs on the car industry, as gold reaches a new record high but the pound shrinks again against the US dollar.
IG says futures indicate the FTSE 100 to open up 3.8 points at 8,669.92 on Friday. The index of London large-caps closed down 23.47 points, 0.3%, at 8,666.12 on Thursday.
In the US on Thursday, Wall Street ended lower, with the Dow Jones Industrial Average down 0.4%, the S&P 500 0.3% lower and the Nasdaq Composite down 0.5%.
"Fundamentally, this remains a market which is desperately seeking a catalyst, and one where participants are reluctant to take on too much risk in the interim, particularly as the 2nd April tariff deadline, and next Friday’s jobs report, continue to loom large on the horizon," commented Pepperstone analyst Michael Brown.
"This meandering is, perhaps, best exemplified by the FX space, where most G10s continue to trade in choppy fashion, albeit with some marginal USD softness having crept in yesterday, perhaps as a result of EoM/Q flows skewing things on the T+2 value date. Still, I favour fading any USD strength for the time being, with the idea of US exceptionalism now stone dead. This view, incidentally, has nothing to do with the fact that I have a rather punchy lunch riding on EUR/USD trading 1.10 before it hits parity!"
Sterling was quoted at USD1.2940 early Friday, lower than USD1.2960 at the London equities close on Thursday.
The euro traded at USD1.0785 early Friday, lower than USD1.0797 late Thursday. Against the yen, the dollar was quoted down at JPY150.68 versus JPY151.05.
Brown continued: "Perhaps the 'trade du jour' remains long gold, with the yellow metal continuing to shine, and trading to fresh record highs during Thursday’s session. Continued haven demand, coupled with EM central bank buying in an effort to diversify FX reserves, make for a convincing bull case here, and I remain happy to ride the bullish momentum wave higher for the time being."
Gold was quoted at USD3,082.86 an ounce early Friday, up from USD3,051.11 on Thursday. The yellow metal hit a record high of USD3,083.31 earlier on Friday morning.
Brent oil was trading at USD73.21 a barrel early Friday, lower than USD73.83 late Thursday.
A senior Federal Reserve official has said it seems "inevitable" that US President Donald Trump's tariff plans will push up near term inflation, though the increase could be short-lived.
Since returning to the White House, Trump has threatened tariffs on top trading partners – including China, Canada, and Mexico – only to roll some of them back, sowing confusion among investors and political leaders.
He has also imposed duties of 25% on the import of steel and aluminium, announced a 25% tariff on imported cars, and plans to introduce more tariffs next week.
"It looks inevitable that tariffs are going to increase inflation in the near term," Boston Fed President Susan Collins told an event in Boston.
"If it's a price level increase that should feed through into inflation relatively quickly," said Collins, who is a voting member of the Fed's rate-setting committee this year. "And then over time, the underlying inflationary forces would then kick in."
"And so my baseline outlook is more in that context," she continued, adding that if there were additional rounds of tariffs, or if they were more broad-based, then the inflationary impact could be "more persistent."
In Asia on Friday, the Nikkei 225 index in Tokyo faded 2.0%. In China, the Shanghai Composite was down 0.5%, while the Hang Seng index in Hong Kong was down 0.4%. The S&P/ASX 200 in Sydney closed 0.2% higher.
Top trade officials from South Korea, Japan and China will meet this weekend in Seoul to discuss economic cooperation, a South Korean government source said Friday.
Seoul and Tokyo are major auto exporters, and China has also been hit hard by US tariff measures.
The Trilateral Economic and Trade Ministers' Meeting will be held on Sunday morning in Seoul.
Chinese leader Xi Jinping on Friday warned of "severe challenges" to global trade, vowing to open the country's door "wider and wider" to foreign firms as Beijing faces down a mounting trade war with the US.
Meeting executives including hedge fund chief Ray Dalio and Samsung Electronics chief Lee Jae-yong in Beijing's ornate Great Hall of the People, Xi warned that "unilateralism and protectionism" were on the rise.
Meanwhile, the era of deep economic, security and military ties between Canada and the US "is over," Canadian Prime Minister Mark Carney said Thursday, a day after President Donald Trump announced steep auto tariffs.
"The old relationship we had with the US based on deepening integration of our economies and tight security and military cooperation is over," Carney said in Ottawa.
He added that the White House had reached out to schedule a call with Trump, which Carney expected to happen in "the next day or two."
In Friday's corporate calendar, full-year results from Amaroq Minerals.
In the economic calendar on Friday, UK retail sales at 0700 GMT and US personal consumption expenditures data at 1230 GMT.
By Emily Parsons, Alliance News reporter
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