(Alliance News) - Stock prices in London are seen opening slightly higher on Friday as investors weigh whether a second report showing easing US inflation is enough for the Federal Reserve to change course on aggressive tightening.
IG futures indicate the FTSE 100 index will open 6.49 points higher at 7,472.40. The index closed down 41.20 points, or 0.6%, at 7,465.91 Thursday.
Data on Thursday showed the US producer price index rose by 9.8% in July on a year before, easing from an 11% annual rise in June. The latest reading was lower than the market forecast, cited by FXStreet, of 10%.
The factory price data came just a day after consumer price inflation moderated more-than-expected to an annual rate of 8.5% in July, from 9.1% in June.
Despite the data, leading Fed officials have continued to speak of the urgent need to address inflation, setting the stage for another potentially large rate hike in September.
San Francisco Fed chief Mary Daly was the latest to bring markets down to earth, telling Bloomberg TV that the data were "significant in that they are saying that we're seeing some improvement but they're not victory".
She added she would likely support a half-point hike at next month's meeting, but was open to a third successive three-quarter-point lift if the data showed it was needed.
Daly also tempered hopes that the bank could begin cutting borrowing costs next year if prices are brought down, and said interest rates would be held for a period before any reductions are made.
Meanwhile, Rishi Sunak has ramped up his promises to tackle the cost-of-living crisis in the UK as he seeks to gain ground on his rival in the Tory leadership contest.
The former UK chancellor has said he is prepared to find up to GBP10 billion of extra support for those facing rising bills in the autumn – with a vision to cover the total cost for up to 16 million vulnerable people, according to The Times.
It said he valued his cut to VAT on energy at GBP5 billion, and would find the same amount again to go towards helping the most in need. Writing in the newspaper, he warned: "You can't heat your home with hope."
The pound was quoted at USD1.2197 early Friday, down from USD1.2205 at the London equities close Thursday.
The euro was priced at USD1.0320, down from USD1.0328. Against the yen, the dollar was trading at JPY133.18 in London, higher against JPY132.79.
Brent oil was quoted at USD99.07 a barrel Friday morning, down from USD98.87 late Thursday. Gold stood at USD1,791.55 an ounce, firm against USD1,789.51.
New York ended mixed on Thursday, with the Dow Jones Industrial Average up 0.1%, but the S&P 500 closed down 0.1% and Nasdaq Composite down 0.6%.
In Asia on Friday, the Nikkei 225 index was up 2.4%, reopening after being closed for a holiday on Thursday. In China, the Shanghai Composite was down 0.1%, while the Hang Seng index in Hong Kong was up 0.4%. The S&P/ASX 200 in Sydney was down 0.7%.
Friday's UK corporate calendar has half-year results from gambling companies Flutter Entertainment and 888 Holdings.
The economic calendar on Friday has UK GDP at 0700 BST, eurozone industrial production at 1000 BST and the US Michigan consumer sentiment index at 1500 BST.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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