FTSE 100 called up despite hawkish Fed speak

(Alliance News) - Stocks in London are set to open higher on Thursday on the final trading day of a holiday-shortened week, despite some hawkish words from a US central banker.

IG says futures indicate the FTSE 100 to open up 33.9 points, 0.4% at 7,965.88 on Thursday. The index of London large-caps closed up 1.02 points at 7,931.98 on Wednesday.

Sterling was quoted at USD1.2628 early Thursday, largely flat from USD1.2630 at the London equities close on Wednesday. The euro traded at USD1.0816 early Thursday, lower than USD1.0823 late Wednesday.

There is a UK gross domestic product reading due at 0700 GMT.

The US Federal Reserve should either scale back or delay its interest rate cuts in response to "disappointing" inflation data, a senior Federal Reserve official said.

"In my view, it is appropriate to reduce the overall number of rate cuts or push them further into the future in response to the recent data. Shorter-term inflation measures are now telling me that progress [in reducing inflation] has slowed and may have stalled. But we will need more data to know that," Fed Governor Christopher Waller told a conference in New York.

He continued: "I see economic output and the labour market showing continued strength, while progress in reducing inflation has slowed. Because of these signs, I see no rush in taking the step of beginning to ease monetary policy"

In the US on Wednesday, Wall Street ended higher, with the Dow Jones Industrial Average up 1.2%, the S&P 500 up 0.9% and the Nasdaq Composite up 0.5%.

Against the yen, the dollar was quoted at JPY151.32 on Thursday morning London time, slightly lower versus JPY151.35 at the European equities close Wednesday.

Numerous policymakers at the Bank of Japan had called for a cautious approach to policy normalisation, a summary of opinions of its March meeting revealed.

Earlier this month, in a long-anticipated move, the BoJ ended its negative interest rate policy, believing that sustainably achieving its 2% price stability target was "in sight".

According to the summary, one policymaker said: "The bank would need to emphasize its cautious stance in the case of terminating the negative interest rate policy, as Japan's economy is not in a state where rapid policy interest rate hikes are necessary."

Another board member underscored the importance of communicating that the policy change will "not be a regime shift toward monetary tightening, but rather a part of efforts to achieve the price stability target".

In Asia on Wednesday, the Nikkei 225 index in Tokyo was down 1.5%. In China, the Shanghai Composite was up 0.4%, while the Hang Seng index in Hong Kong was up 1.0%. The S&P/ASX 200 in Sydney closed up 1.0%.

Brent oil was quoted at USD85.72 a barrel early Thursday, up from USD85.41 late Wednesday.

Gold was quoted at USD2,197.94 an ounce early Thursday, higher against USD2,190.33 at the close on Wednesday.

In Thursday's corporate calendar, retailer JD Sports Fashion posts its full-year results.

In the economic calendar on Thursday, US gross domestic product and initial jobless claims figures are both out at 1230 GMT.

By Greg Rosenvinge, Alliance News senior reporter

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