19th Feb 2014 07:35
LONDON (Alliance News) - UK stocks are set to open slightly lower Wednesday as investors await minutes from the latest meetings of both the Bank of England and the Federal Open Market Committee.
The FTSE 100 and FTSE 250 extended their recent gains to close up for the third consecutive day Tuesday, while US and Asian stocks traded mixed overnight. However the UK equity rally is set to end Wednesday, with both CMC Markets and IG indicating that the FTSE 100 will open down at approximately 6,782 points, having closed at 6,796.43 on Tuesday.
"Domestic focus will firmly be on February's MPC [Monetary Policy Committee] minutes and December's labour market report," says Carl Paraskevas, senior international macroeconomist at Lloyds Bank.
The latest minutes, released at 0930 GMT, will be examined by investors attempting to second guess the possible timing of any potential interest rate rise.
The ILO unemployment rate for December is also released at 0930 GMT. Economists are forecasting that the three month average will remain unchanged at 7.1%. However, "there is a risk we could see the unemployment rate increase slightly," says Michael Hewson, chief market analyst at CMC Markets. "It was only in October that the rate was at 7.7% and unemployment levels never fall in a straight line," he says.
January's claimant count, released at the same time, is forecast to fall by 20,000 in January after declining 24,000 in December.
"In the US, the release of the January FOMC minutes will be watched closely for signs the Fed may be reconsidering the pace of tapering, after softer-than-expected US data," says Paraskevas. However, after Fed Chair Janet Yellen played down these concerns in her testimony last week, "the minutes are likely to reflect her views," he adds.
The Federal Open Market Committee releases the minutes at 1900 GMT.
Also in the data calendar Wednesday, December's construction output readings for the eurozone are scheduled for 1000 GMT.
US building permits, housing starts and producer price index figures are all released at 1330 GMT, ahead of the publication of the Redbook index at 1355 GMT. Federal Reserve Bank of Atlanta president Dennis Lockhart speaks at 1715 GMT, with President of the Federal Reserve Bank of St. Louis James Bullard's speaking at 1800 GMT.
In corporate news, blue-chip Sports Direct International has released an interim management statement ahead of the London equity market open. The sports retailer said third-quarter group sales were up 11% to GBP655.4 million, from GBP589.5 million in the same period of 2013, while gross profit jumped 15% to GBP280.7 million, up from GBP244.8 million.
And Pets At Home has become the third retailer to confirm that it will list in London this year.
FTSE 250-listed Galliford Try has also released interim results.
By James Kemp; [email protected]; @jamespkemp
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
Galliford TrySports Direct