(Alliance News) - London's FTSE 100 is called to open higher on Wednesday, after comments by a Federal Reserve official, who suggested a soft-landing for the US economy is possible, calmed the market.
Also helping was the absence of any hawkish remarks in a speech by Fed Chair Jerome Powell in Stockholm on Tuesday. He offered little in the way of monetary policy clues and instead focused on the importance of central bank independence.
IG says futures indicate the FTSE 100 index of large-caps to open 31.7 points, 0.4%, higher at 7,726.19 on Wednesday. The index closed down 30.45 points, or 0.4%, at 7,694.49 on Tuesday.
Asian equities were largely on the rise. The Shanghai Composite in China was flat in late dealings, but the Hang Seng in Hong Kong was up 1.2% in afternoon trade. The Nikkei 225 added 1.0% in Tokyo, while Sydney's S&P/ASX 200 rose 0.9%.
In New York on Tuesday, the Dow Jones Industrial Average rose by 0.6%, the S&P 500 by 0.7% and the Nasdaq Composite by 1.0%.
US unemployment has stayed low despite rising interest rates, representing a "hopeful sign" that consumer price inflation can slow without a significant downturn, a Fed official said Tuesday.
Slowing the economy typically means that job creation also decelerates, as borrowing becomes more expensive.
But Fed Governor Michelle Bowman said Tuesday that "unemployment has remained low as we have tightened monetary policy and made progress in lowering inflation", in a prepared speech to an event in Florida.
"I take this as a hopeful sign that we can succeed in lowering inflation without a significant economic downturn," she added.
Her comments came after Fed Chair Jerome Powell avoided future policy in a speech in Stockholm. He did, however, stress the importance of central bank independence.
The pound rose to USD1.2169 early Wednesday in London from USD1.2146 a day earlier. The euro climbed to USD1.0751 from USD1.0724. Against the yen, the dollar edged up to JPY132.31 from JPY132.29.
Tokyo on Wednesday criticised China's move to stop issuing visas to Japanese citizens, saying it had protested the measure and demanded that Beijing reverse the decision.
China on Tuesday said it would suspend the issuing of visas for Japanese and South Korean citizens in response to measures imposed by Tokyo and Seoul on arrivals from the mainland, where Covid cases are surging.
China's apparently retaliatory move was "extremely regrettable", Japan's top government spokesman Hirokazu Matsuno said.
He pointed out that Japan's measures, which require arrivals from mainland China and Macau to test before travel and on landing, do not prevent Chinese travellers from entering the country.
Brent oil was quoted at USD79.54 a barrel early Wednesday, down from USD79.74. Gold traded at USD1,883.35 an ounce, rising from USD1,875.50.
"Gold has done well to weather the steepest rise in Fed Funds since 1969, as an uncertain macro environment should drive financial accumulation of gold, reversing last year's washout. Investors should favour gold over the other precious metals, as it has little to fear from weakening industrial production. The USD is likely to decline through 2023, which sets up a reasonably decent entry at the current levels, given the US dollar is just starting to embark on the expected downtrend," SPI Asset Management analyst Stephen Innes commented.
In Wednesday's UK corporate calendar, there are trading statements from athleisure retailer JD Sports Fashion, iron miner Ferrexpo, and house builder Barratt Developments.
In a quiet economic calendar, there is the eurozone current account at 1000 GMT.
By Eric Cunha, Alliance News news editor
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