AUS
NZ
UK
CA
USA
IND
Highlights
FTSE 100 expected to open marginally higher ahead of BoE announcement
Bank of England likely to maintain current rates, with cuts anticipated in August
UK consumer sentiment improves, led by optimism among younger generations
Stocks in London are expected to open modestly higher on Thursday, with investors closely watching the Bank of England’s latest interest rate decision. The central bank is widely expected to leave rates unchanged at midday London time, as markets anticipate a resumption of rate cuts from August onwards.
In the US, the Federal Reserve also held interest rates steady, citing persistent inflationary pressures and a slower growth outlook. However, the Fed reaffirmed expectations for two rate cuts later this year.
According to IG, futures indicate the FTSE 100 will edge up by a few points on Thursday. The index closed slightly higher on Wednesday, ending the session with a gain.
Sterling weakened in early Thursday trading, quoted at USD1.3403, down from USD1.3472 at Wednesday’s close.
Consumer Sentiment and Economic Outlook
UK consumer sentiment improved in June, marking its highest level since December. However, it remains in negative territory, according to the latest BRC-Opinium consumer sentiment monitor. Expectations for the UK economy over the next three months rose, as did consumer perceptions of their personal financial situations.
The survey noted that Gen Z respondents saw the most significant improvement in sentiment, reflecting a more optimistic outlook compared to older demographics. Helen Dickinson, Chief Executive of the British Retail Consortium, commented on the shift, highlighting generational differences in financial confidence.
Geopolitical Developments
UK Foreign Secretary David Lammy is scheduled to meet with US Secretary of State Marco Rubio in Washington, amid renewed geopolitical tensions. The meeting follows remarks by former US President Donald Trump regarding possible support for Israeli strikes against Iran.
UK Prime Minister Keir Starmer chaired a Cobra meeting on Wednesday to discuss ongoing diplomatic efforts and support for British citizens in the region.
Currency and Market Movements
In early trade, the euro was lower at USD1.1464 compared to USD1.1526 late Wednesday. The dollar gained against the yen, trading at JPY145.14, up from JPY144.65.
On Wall Street, major indices closed mixed on Wednesday. The Dow Jones Industrial Average and the S&P 500 dipped slightly, while the Nasdaq Composite posted a marginal gain.
Asian markets tracked lower in Thursday’s session. The Nikkei 225 in Tokyo, the Shanghai Composite, and the Hang Seng in Hong Kong all recorded declines. Australia's S&P/ASX 200 also edged lower.
Commodities and Economic Diary
Gold was quoted at USD3,370.28 per ounce early Thursday, down from USD3,387.84. Brent crude traded higher at USD76.76 per barrel, compared to USD75.06 on Wednesday.
On the corporate front, Informa and Whitbread are scheduled to hold their annual general meetings. XPS Pensions will release its full-year results.
In terms of macroeconomic indicators, eurozone construction output and Switzerland’s interest rate decision are due later in the day. US markets remain closed on Thursday for Juneteenth National Independence Day.
