(Alliance News) - Stocks in London are set to open lower on Friday, as global markets take fright at the prospect of "higher-for-longer" interest rates in the US.
IG says futures indicate the FTSE 100 to open down 15.0 points, 0.2%, at 7,318.63 on Friday. The index of London large-caps closed up 13.10 points, or 0.2% at 7,333.63 on Thursday.
"After an initially positive start to the day yesterday, only the FTSE 100 managed to eke out any sort of gains, after a rebound in yields and the fading of the Nvidia sugar rush saw European markets slip into negative territory," said CMC Markets' Michael Hewson.
Investors' focus will be on the main event of this week: Federal Reserve Chair Jerome Powell's keynote speech at the Jackson Hole economic symposium in Wyoming.
He is due to give a 25-minute speech at around 10.05 EDT, or 15.05 BST.
"As we already know from recent comments from various Fed officials it is clear the Fed believes the fight against inflation is far from over, and in that context it's unlikely he will deliver any dovish surprises," CMC's Hewson predicted.
There will also be an address from European Central Bank President Christine Lagarde later on Friday.
During the Saturday session, there will be a panel featuring Bank of England Deputy Governor Ben Broadbent and Bank of Japan Governor Kazuo Ueda, which will discuss the topic of 'Globalization at an Inflection Point'.
Stocks on Wall Street struggled on Thursday, with the Dow Jones Industrial Average down 1.1%, the S&P 500 down 1.4% and the Nasdaq Composite down 1.9%.
The initial shine from Nvidia's forecast-beating results faded as fears about interest rates came back to the fore.
These were stoked by a US jobless print showing that the US labour market remains "tight", with new claims for unemployment coming in lower than expected.
Further, a leading Federal Reserve official held back from ruling out further hikes until inflation is more clearly on a downward path.
"I am not yet seeing the slowing that I think is going to be part of what we need for that sustainable trajectory to get back to 2% [inflation] in a reasonable amount of time," Boston Fed President Susan Collins told the Financial Times, later adding that "that resilience really does suggest we may have more to do".
The dollar made gains against major currencies in early exchanges in Europe.
Sterling was quoted at USD1.2569 early Friday, dropping from USD1.2639 at the London equities close on Thursday. The euro traded at USD1.0783, lower than USD1.0835. Against the yen, the dollar was quoted at JPY146.05, up versus JPY145.66.
Asian markets took their cue from New York on Friday, the Nikkei 225 index in Tokyo was down 2.0%. In China, the Shanghai Composite was down 0.7%, while the Hang Seng index in Hong Kong was down 1.2%. The S&P/ASX 200 in Sydney was down 1.1%.
Gold was quoted at USD1,913.69 an ounce early Friday, lower than USD1,921.41 on Thursday. Brent oil was trading at USD83.62 a barrel, higher than USD82.41.
Friday's economic calendar has a gross domestic product print for Germany at 0700 BST.
By Elizabeth Winter, Alliance News senior markets reporter
Comments and questions to newsroom@alliancenews.com
Copyright 2023 Alliance News Ltd. All Rights Reserved.
