FTSE 100 Seen Extending Gains on U.S. Rebound; U.K. Politics Still in Focus

London Stocks Seen Opening Higher

0642 GMT - The FTSE 100 index is expected to open around 88 points higher, according to IG, having closed on Thursday at 6850.27, tracking gains in Asia overnight. This comes after a big reversal higher in U.S. equities, which eventually shrugged off strong U.S. inflation data and prospects of further aggressive interest-rate rises. "U-turn might be the word of the week or simply just volatility," Danske Bank analysts say. They note that U.K. politics are another big driver for risk sentiment, with reports emerging that the U.K. government may be prepared to backtrack on more of its plans for unfunded tax cuts. ([e-mail])

 
Companies News: 

Diageo to Increase Stake in East African Breweries to Up to 65%

Diageo PLC said Friday that it plans to increase its stake in East African Breweries PLC to up to 65% through a partial tender offer.

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Mondi 3Q Underlying Ebitda Rose, Expects Progress in Full Year

Mondi PLC said Friday that third-quarter underlying Ebitda rose 55%, and the despite expecting inflation to hit the fourth quarter, it sees a year of good progress.

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Loungers Early FY 2023 Sales Rose; Doesn't See Change in Consumer Spending

Loungers PLC said Friday that like-for-like sales grew 17% in the 24 weeks to Oct. 2 when compared with the year-prior period and that it hasn't seen changes in consumer spending.

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Premier Miton 4Q Assets Under Management Fell Amid Uncertain Market

Premier Miton Group PLC said Friday that assets under management fell in the fourth quarter of fiscal 2022, driven by client caution about committing new investment in an uncertain market.

 
Market Talk: 

Eurozone Bond Yields Slide in Hope of UK Government Action

0641 GMT - Eurozone government bond yields slide amid hopes that the UK government adjusts its fiscal plans to avoid further meltdown in the gilt market, analysts say. "The UK government appears to be seeking a truce with markets and the BoE [Bank of England]," Christoph Rieger, head of rates and credit research at Commerzbank, says in a note. "As hopes about a more responsible fiscal policy persist on the final day of BoE gilt purchases, chances improve that this bearish factor for global bonds is at least moving to the sidelines," he says. Ten-year eurozone bond yields slide by up to 22 basis points, according to Tradeweb. The 10-year German Bund yield drops 16bps to 2.169%, while Italy's 10-year BTP yield slides 19bps to 4.563%, according to Tradeweb. ([e-mail])

UK Gilts Aren't the Only Bonds Challenged by Duration Aversion

0622 GMT - Duration aversion is raging beyond U.K. gilts as funding needs are rising everywhere alongside interest rates, while inflation pressure persists and bond markets are in a perilous state, Commerzbank's analysts say. Governments' rising funding needs make bond investors pull back, while central banks' quantitative easing support is missing or even reversing, Christoph Rieger, head of rates and credit research at Commerzbank, says in a note. "The willingness to absorb duration has thus collapsed, despite higher yields," he says. ([e-mail])

Contact: London NewsPlus; [e-mail]

(END) Dow Jones Newswires

10-14-22 0300ET