22nd May 2015 05:59
LONDON (Alliance News) - UK stock indices are expected to follow US and Asian counterparts higher Friday, adding to the small gains posted on Thursday, as investors await a raft of macroeconomic data from the UK, Europe and the US, as well as a host of speeches from central bankers.
US stocks closed broadly higher Thursday following the latest batch of US economic data, with the S&P 500 closing up 0.2% at 2,130.825, the NASDAQ Composite closing up 0.4% at 5,090.794 and the DJIA ending the day fractionally higher at 18,285.74. This positive sentiment has rolled into the Asian session where, ahead of the UK equity market open, the Nikkei in Tokyo is up 0.2% at 20,244.29, the Hang Seng is up 1.6% at 27,973.19 and the Shanghai Composite index is up 2% at 4,619,741.
In the UK, meanwhile, the FTSE 100 is called to open marginally higher Friday, adding to the marginal gains posted on Thursday when the blue-chip index closed up 0.1% at 7,013.47. IG and Oanda both expect the index to open approximately 6 points higher at 7,019, while CMC Markets calls it to open at around 7,022.
In a busy economic calendar Friday, German gross domestic product data for the first quarter are published at 0700 BST, with German IFO readings for May due shortly after at 0900 BST. Italian industrial sales figures for March are also released at 0900 BST, ahead of UK public net borrowing information at 0930 BST and Italian retails sales data at 1000 BST.
In the afternoon, focus will shift to the release of US consumer price inflation information for April, which is set to come out at 1330 BST. According to FXStreet.com, economists expectations are for US CPI to fall to 0.1% month-on-month in April, down from the 0.2% posted in March, but to remain unchanged on a yearly basis at negative 0.1%.
"With US investors sitll holding onto the belief that the [US] Federal Reserve will raise rates at some point this year, the one thing that looks sent to prevent them is weak inflation numbers," says Michael Hewson, chief market analyst at CMC Markets. "Given the weakness elsewhere in the world, it is hard to suggest that the US would be able to stand apart from the slide in global prices," he adds.
In the FX market, ahead of the data and the UK equity market open, the pound trades at USD1.56670, EUR1.4064, CHF1.46530 and JPY189.270.
On top of the economic data, investors also will be keeping a keen eye on a host of central bankers who are due to speak Friday. European Central Bank President Mario Draghi is due to give his first speech of the day at 0900 BST, with Bank of England Governor Mark Carney, Bank of Japan Governor Haruhiko Kuroda and Draghi also all expected to speak at 1430 BST. US Federal Reserve Chair Janet Yellen, meanwhile, is due to speak at 1800 BST.
"The Friday leading into the bank holiday weekend can quite often be a little quieter and see lower trading volumes, with traders turning it into an extended break," says Craig Erlam, senior market analyst at Oanda. However, "given some of the data being released today and the number of central bankers taking part in events in Portugal and Rhode Island, I think today is going to be a million miles from slow and boring," he adds.
In corporate news, blue-chip Severn Trent is scheduled to release full-year results ahead of the UK equity market open Friday, while FTSE 250-listed Close Brothers Group is due to release an interim management statement.
By James Kemp; [email protected]; @jamespkemp
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