LONDON MARKET EARLY CALL: FTSE called up with EU, US inflation ahead

(Alliance News) - Stocks in London are set to open higher on Thursday, amid a more handover from ...

Alliance News 30 November, 2023 | 6:56AM
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(Alliance News) - Stocks in London are set to open higher on Thursday, amid a more handover from Asia, despite some downbeat Chinese factory data.

Focus on Thursday will be on inflation readings, with a consumer price index print from the eurozone to come at 1000 GMT, and the latest core personal consumption expenditures index data from the US at 1330 GMT. The reading is the Fed's preferred inflationary gauge.

IG says futures indicate the FTSE 100 to open up 15.5 points, 0.2%, at 7,438.96 on Thursday. The index of London large-caps closed down 31.78 points, 0.4%, at 7,423.46. The index has now fallen for three days in a row.

"Today we get the latest flash November CPI numbers for France, Italy, and the euro area which if they follow the trend from Spain and Germany yesterday, will put the threat of any prospect of further rate hikes from the ECB even less credible than they are already," CMC Markets analyst Michael Hewson commented.

"Last but by no means least EU flash CPI is forecast to slow to 2.7% from 2.9%, however given the size of the downside surprises seen in the Germany and Spain numbers we could well see an even weaker reading of 2.5%. Core CPI is expected to slow to 3.9% from 4.2%."

In the US, the core PCE index is expected to have registered a 3.5% year-on-year rise in October, cooling from 3.7% in September, according to FXStreet. The headline reading is expected to ease to 3.0% from 3.4%.

The economic calendar also has a German retail sales reading at 0700 GMT, and the nation's unemployment data at 0855 GMT.

In the US on Wednesday, the Dow Jones Industrial Average ended slightly higher, the S&P 500 lost 0.1% and the Nasdaq Composite fell 0.2%.

In Asia on Thursday, the Nikkei 225 index in Tokyo closed up 0.5%. In China, the Shanghai Composite was up 0.3%, while the Hang Seng index in Hong Kong was 0.4% higher. The S&P/ASX 200 in Sydney closed up 0.7%.

Sterling rose to USD1.2705 on Thursday morning, up from USD1.2674 late Wednesday afternoon. The euro climbed to USD1.0979 from USD1.0966. Against the yen, the dollar bought JPY146.92, down from JPY147.36.

Brent oil was trading at USD83.15 a barrel early Thursday, up from USD81.80 late Wednesday. Gold was quoted at USD2,044.45 an ounce, up from USD2,041.08.

There is also the latest meeting of the Opec+ group of oil producing nations on Thursday.

SPI Asset Management analyst Stephen Innes commented: "There is increasing speculation that deeper Opec+ [output] cuts may encounter strong resistance, particularly from the United Arab Emirates and African producers such as Angola and Nigeria. These countries resist accepting lower production baselines, even under weaker market fundamentals. The dynamics within the OPEC+ alliance continue to play a crucial role in determining production policies and addressing global oil supply challenges.

"Due to this ongoing disagreement among African members, the short-term price action may revert to a knee-jerk bounce even if it ultimately leads to a modest group cut. This is because the market will perceive a higher probability of reduced Opec compliance in the future."

By Eric Cunha, Alliance News news editor

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