1st Oct 2024 07:05
(Alliance News) - Stocks in London are set to open higher on Tuesday, ahead of a number of manufacturing PMI prints from the UK and elsewhere.
IG says futures indicate the FTSE 100 to open up 24.2 points, or 0.3%, at 8,263.20 on Tuesday. The index of London large-caps closed down 83.81 points, 1.0%, at 8,236.95 on Monday.
UK shop prices moved further into deflation in September, reflecting discounts and fierce competition, a survey showed.
According to figures from the British Retail Consortium, shop price deflation was at 0.6% in September, compared with deflation of 0.3% in the previous month. Shop price annual growth was at its lowest rate since August 2021, the BRC said.
BRC Chief Executive Helen Dickinson said: "September was a good month for bargain hunters as big discounts and fierce competition pushed shop prices further into deflation. Shop price inflation is now at its lowest level in over three years, with monthly prices dropping in seven of the last nine months."
Sterling was quoted at USD1.3374 early Tuesday, lower than USD1.3397 at the London equities close on Monday.
The euro traded at USD1.1136 early Tuesday, lower than USD1.1142 late Monday. Against the yen, the dollar was quoted at JPY144.35, up versus JPY143.31.
European Central Bank President Christine Lagarde expressed confidence in Brussels that inflation could soon return to the bank's target level and did not rule out a further interest rate cut.
"Looking ahead, inflation might temporarily increase in the fourth quarter of this year as previous sharp falls in energy prices drop out of the annual rates, but the latest developments strengthen our confidence that inflation will return to target in a timely manner," Lagarde told a European Parliament's economic and monetary affairs committee.
"We will take that into account in our next monetary policy meeting in October. The ECB staff projections from September foresee inflation to average 2.5% in 2024, 2.2% in 2025 and 1.9% in 2026," she said.
In the US on Monday, Wall Street ended higher, with the Dow Jones Industrial Average up slightly, the S&P 500 up 0.4% and the Nasdaq Composite also up 0.4%.
The US is set to see inflation cool further towards policymakers' target, Federal Reserve Chair Jerome Powell said, with interest rates likely to come down over time too.
"Disinflation has been broad based, and recent data indicate further progress toward a sustained return to two percent," Powell said, according to prepared remarks of a speech he is set to deliver at the National Association for Business Economics annual meeting in Tennessee.
In particular, Powell noted that prices of goods – excluding volatile food and energy categories – have fallen while supply bottlenecks have eased. With the growth rate in rents charged to new tenants remaining low, he added, housing services inflation will likely continue to decline.
He also signalled that further rate cuts are in the pipes, if there are no major surprises. "Looking forward, if the economy evolves broadly as expected, policy will move over time toward a more neutral stance," Powell said.
In Asia on Tuesday, the Nikkei 225 index in Tokyo was up 2.0%. In China, the Shanghai Composite was up 8.1%, while the Hang Seng index in Hong Kong was up 2.4%. The S&P/ASX 200 in Sydney closed down 0.8%.
Gold was quoted at USD2,637.97 an ounce early Tuesday, higher than USD2,633.76 on Monday.
Brent oil was trading at USD71.80 a barrel early on Tuesday, lower than USD72.30 late Monday.
In Tuesday's corporate calendar, there are full-year results from James Halstead and TheWorks.co.uk, and half-year results from Schroders Capital Global Innovation Trust.
In the economic calendar on Tuesday, there is manufacturing PMI from the eurozone, as well as from Germany, France, and the UK. Later in the day, there is the Redbook index, more manufacturing PMIs, and the Dallas Fed service index from the US.
By Holly Beveridge, Alliance News senior reporter
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