Stocks called up ahead of US Fed decision

(Alliance News) - Stocks in London are set to open higher on Wednesday, ahead of the latest US Federal Reserve interest rate decision.

IG says futures indicate the FTSE 100 to open up 28.49 points, 0.3%, 8,176.30 on Wednesday. The index of London large-caps closed down 80.67 points, 1.0%, at 8,147.81 on Tuesday.

The Federal Reserve is expected to maintain interest rates at the current level once again, and the focus Wednesday will be on what it reveals in its latest projections, with the prospect of a hat-trick of cuts this year all but over.

According to the CME FedWatch Tool, there is a 99% chance the Fed maintains the federal funds rate range at 5.25%-5.50%. It will be the seventh successive hold by the US central bank.

Potentially muddying the waters, policymakers will have a US inflation reading to digest just hours before the decision. According to FXStreet, the annual rate of consumer price inflation is expected to have remained unmoved at 3.4% in May, where it stood in April. The annual rate of core inflation is expected to have ebbed to 3.5% from 3.6%.

In the US on Tuesday, Wall Street ended mixed, with the Dow Jones Industrial Average down 0.3%, whilst the S&P 500 was up 0.3% and the Nasdaq Composite up 0.9%.

Sterling was quoted at USD1.2743 early Wednesday, higher than USD1.2722 at the London equities close on Tuesday.

The euro traded at USD1.0741 early Wednesday, higher than USD1.0727 late Tuesday. Against the yen, the dollar was quoted at JPY157.27, up slightly versus JPY157.26.

In Asia on Wednesday, the Nikkei 225 index in Tokyo was down 0.5%. In China, the Shanghai Composite was up 0.3%, while the Hang Seng index in Hong Kong was down 1.1%. The S&P/ASX 200 in Sydney closed down 0.6%.

Gold was quoted at USD2,312.90 an ounce early Wednesday, higher than USD2,312.47 on Tuesday. Brent oil was trading at USD82.35 a barrel early Wednesday, higher than USD81.74 late Tuesday.

In the economic calendar on Wednesday, there is a slew of inflation readings, including Germany at 0700 BST and the US at 1330 BST. The economic diary, which also has UK gross domestic product at 0700 BST, culminates with the latest Fed decision at 1900 BST.

By Sophie Rose, Alliance News senior reporter

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