15th Oct 2024 06:58
(Alliance News) - Stocks in London are set to open higher on Tuesday, as investors prepare for a rate call from the European Central Bank, and react to calls for caution from US Federal Reserve Governor Christopher Waller.
IG says futures indicate the FTSE 100 to open 19.8 points, or 0.2%, higher at 8,306.70 on Tuesday. The index of London large-caps closed up 39.01 points, or 0.5%, at 8,292.66 on Monday.
Sterling was quoted at USD1.3048 early Tuesday, lower than USD1.3052 at the London equities close on Monday.
Rachel Reeves warned her budget on October 30 would be "tough" as she gave the clearest signal yet that businesses will face a hike in national insurance.
The UK chancellor stressed that Labour manifesto's promise to not increase national insurance contributions was related to taxes paid by working people – the employee element – rather than the sum paid by employers.
The chancellor was speaking to reporters at the government's International Investment Summit, where deals worth more than GBP60 billion were hailed as a sign that the UK is open for business.
Reeves told reporters at the summit that there would be no increase in investment unless the Government could reassure the markets that it offered stability.
Indicating that employer NICs were in her sights, she said: "We were really clear in our manifesto that we weren't going to increase the key taxes paid by working people: income tax, national insurance and VAT and, on the business side of commitment, that we would cap corporation tax at its current rate of 25% which was the lowest in the in the G7 and we will stick to the commitments we made in our manifesto."
The euro traded at USD1.0892 early Tuesday, lower than USD1.0910 late Monday. Against the yen, the dollar was quoted at JPY149.73, down versus JPY149.83.
In the US on Monday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.5%, the S&P 500 up 0.8% and the Nasdaq Composite up 0.9%.
The US Federal Reserve should be more careful with its pace of rate cuts than it was in September, a senior bank official said, pointing to "disappointing" recent inflation data.
Federal Reserve Governor Christopher Waller told a conference in California, the latest inflation figures were "disappointing," according to prepared remarks.
A Labor Department report last week showed US consumer inflation cooled in the year to September, but a measure stripping out volatile food and energy costs rose slightly.
Economic growth and employment have meanwhile remained strong despite the Fed's elevated interest rates.
"While we do not want to overreact to this data or look through it, I view the totality of the data as saying monetary policy should proceed with more caution on the pace of rate cuts than was needed at the September meeting," he added.
In Asia on Tuesday, the Nikkei 225 index in Tokyo was up 1.1%. In China, the Shanghai Composite was down 1.2%, while the Hang Seng index in Hong Kong was down 2.2%. The S&P/ASX 200 in Sydney closed up 0.7%.
Gold was quoted at USD2,644.55 an ounce early Tuesday, lower than USD2,646.29 on Monday.
Brent oil was trading at USD75.06 a barrel early Tuesday, lower than USD77.19 late Monday.
In Tuesday's corporate calendar, there are trading statements from Audioboom, IntegraFin, Qinetiq, Reach, Victorian Plumbing, and Wise. There are full-year results from Bellway and Seraphim Space, and half-year results from Bytes Technology.
In the economic calendar, there is industrial production and an economic sentiment survey from the eurozone, CPI from France, wholesale prices from Germany, and unemployment from the UK. Later in the day, there is the New York empire state manufacturing index and the Redbook index from the US.
By Holly Beveridge, Alliance News senior reporter
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