12th Aug 2025 06:41
(Alliance News) - London's FTSE 100 is called to open in the green on Tuesday, after the US and China extended a tariff truce, while unemployment and inflation data will keep central banks either side of the Atlantic in focus.
IG says futures indicate the FTSE 100 to open 18.2 points higher, 0.2%, at 9,147.91 on Tuesday. The index of London large-caps closed up 33.98 points, 0.4%, at 9,129.71 on Monday.
US President Donald Trump on Monday ordered a delay in the reimposition of higher tariffs on Chinese goods, hours before a trade truce between Washington and Beijing was due to expire.
The White House's halt on steeper tariffs will be in place until November 10.
"I have just signed an Executive Order that will extend the Tariff Suspension on China for another 90 days," Trump wrote on his Truth Social platform. The truce on steeper levies had been due to expire Tuesday.
While the US and China slapped escalating tariffs on each other's products this year, bringing them to prohibitive triple-digit levels and snarling trade, both countries in May agreed to temporarily lower them.
As part of their May truce, fresh US tariffs targeting China were reduced to 30% and the corresponding level from China was cut to 10%. Those rates will now hold until November – or whenever a deal is cut before then.
Around the same time that Trump confirmed the new extension, Chinese state media Xinhua news agency published a joint statement from US-China talks in Stockholm saying it would also extend its side of the truce.
Sterling rose to USD1.3432 on Tuesday morning, from USD1.3402 at the time of the London equities close on Monday. The euro traded at USD1.1621, up from USD1.1591. Against the yen, the dollar rose to JPY148.29 from JPY148.09.
The yield on the 10-year US Treasury was unchanged at 4.28%. The yield on the 30-year remained at 4.85%.
Figures on the UK jobs market and average earnings at 0700 BST will be watched closely, not least by the Bank of England, as it weighs stubborn inflation against slowing growth and a cooling labour market.
According to consensus cited by FXStreet, the jobless rate is expected to remain at 4.7% for the three months to June.
Since last October's government budget, UK unemployment has risen to 4.7% from 4.3%, and last Thursday, the BoE predicted the unemployment rate will rise to just under 5% by the middle of 2026.
US inflation data follows at 1330 BST.
"While it's just one line of data in the grand market scroll, traders are treating it like the final booby trap before September's FOMC," SPI Asset Management analyst Stephen Innes commented.
"The street's leaning hard — 89% probability priced — toward a 25bp September rate cut. But that's conditional on one thing: the print doesn't come in smoking hot. The market's tolerance band is tight. Core CPI above 0.40% MoM isn't just 'hot,' it's hot enough to torch the carefully constructed dove narrative and put a hawkish floor back under the Fed."
According to FXStreet the annual pace of consumer price inflation is expected to have quickened slightly to 2.8% in July, from 2.7% in June.
A barrel of Brent rose to USD66.88 on Tuesday morning, from USD66.49 at the time of the London equities close on Monday. Gold rose to USD3,353.71 an ounce from USD3,347.03.
In Sydney, the S&P/ASX 200 was 0.3% higher. The Reserve Bank of Australia cut interest rates on Tuesday, as expected, with inflation continuing to moderate.
A 25 basis point cut took the cash rate target to 3.60%. Australia's central bank noted it has cut rates by 75 basis points since the beginning of the year. The RBA last cut its cash rate in May, lowering it by 25 basis points to 3.85% from 4.10%, before unexpectedly holding rates steady in July.
The RBA said the decision on Tuesday was unanimous.
In Tokyo, the Nikkei 225 was up 2.5%. Financial markets in Tokyo were closed at the start of the week.
In China, the Shanghai Composite was up 0.5%. The Hang Seng Index was 0.1% higher.
Tuesday's UK corporate calendar has half-year results from industrial engineering group Spirax, plus trading statements from housebuilder Bellway and recruiter PageGroup.
By Eric Cunha, Alliance News news editor
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