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(Alliance News) - Equities in London are called to open higher on Monday, with inflation readings from the US and UK on the horizon, which could drive equity market sentiment during the remainder of the week.
The US inflation data is reported at 1330 GMT on Tuesday.
It is also a key week for UK data. Unemployment, inflation and economic growth readings will be closely eyed by the Bank of England, with the next interest rate decision from Threadneedle Street around five weeks away.
Going into the data, Bannockburn Global Forex analyst Marc Chandler noted central bank rate cut expectations have been dialled back so far this year.
"The markets are still correcting from the overshoot on rates and the dollar that took place in late 2023. The first Fed rate cut has been pushed out of March and odds of a May move have been pared to the lowest since last November," Chandler said.
"The market has reduced the extent of ECB cuts to about 114 bp (from 160 bp at the end of January and 190 in late 2023). The Bank of England is now expected to cut rates three times this year (75 bp), which is nearly 100 bp less than was discounted at the end of last year."
In early UK corporate news, Tritax Big Box REIT has agreed terms for a possible buyout of UK Commercial Property REIT. Construction firm Galliford Try has landed a spot on a development contract in the UK, while retailer Frasers will kick off a share buyback.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called up 0.2% at 7,590.38
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Hang Seng: financial markets in Hong Kong and Shanghai closed for Chinese New Year
Nikkei 225: financial markets in Tokyo closed for National Day holiday
S&P/ASX 200: closed down 0.4% at 7,614.90
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DJIA: closed down 54.64 points, 0.1%, at 38,671.69
S&P 500: closed up 0.6% at 5,026.61
Nasdaq Composite: closed up 1.3%, to 15,990.66
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EUR: up at USD1.0794 (USD1.0783)
GBP: flat at USD1.2634 (USD1.2632)
USD: down at JPY149.14 (JPY149.31)
GOLD: up at USD2,024.41 per ounce (USD2,021.73)
(Brent): down at USD81.82 a barrel (USD82.03)
(changes since previous London equities close)
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ECONOMICS
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Monday's key economic events still to come:
09:45 GMT eurozone ECB Executive board member Philip Lane speaks
16:00 GMT eurozone ECB Supervisory Board Chair Claudia Buch speaks
16:00 GMT US consumer inflation expectations
17:00 GMT US Federal Reserve Bank of Minneapolis President Neel Kashkari Speaks
19:00 GMT US monthly budget statement
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Tens of thousands more homes will be built under plans to regenerate inner-city brownfield sites, UK minister Michael Gove said on Sunday. The UK housing secretary is set to detail measures next week that will allow developers to convert empty office blocks, department stores and commercial buildings through streamlined planning processes. The UK government will seek to change the law so properties can be brought back into use more quickly to speed up housebuilding in town centres, and offer incentives for developers to build there. Rules will ensure revamped buildings are safe and have natural light, according to the Department for Levelling Up, Housing & Communities. In a speech last year, Gove said an "inner-city renaissance" was the most important component of the government's long-term plan to tackle the UK's housing crisis, with a focus on urban regeneration instead of "swallowing up virgin land".
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UK Prime Minister Rishi Sunak is entering what could be one of the most challenging weeks of his premiership, with potentially gloomy economic numbers, tricky by-elections and opposition to his Rwanda asylum plan. His pledges on the economy are at risk, as official figures on Thursday will show whether the UK slipped into recession. Sunak promised to grow the economy, but if the Office for National Statistics' gross domestic product data for the final three months of last year shows a contraction, it means the UK was in a recession after two consecutive quarters of negative growth. ONS inflation statistics for January could show a small uptick, in what would be a blow to his goal of curbing price rises. Chief Secretary to the Treasury Laura Trott told the Sunday Times: "There will be bumps in the road and on Wednesday we can expect inflation to slightly increase when data for January is published." Sunak is also bracing himself for a double by-election challenge in Wellingborough and Kingswood on Thursday.
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BROKER RATING CHANGES
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RBC cuts JD Sports price target to 135 (150) pence - 'outperform'
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Barclays raises Diploma price target to 3,800 (3,400) pence - 'overweight'
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COMPANIES - FTSE 100
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Pharmaceutical firm GSK said the US health watchdog granted fast track designation for its bepirovirsen treatment for chronic hepatitis B. The process speeds up the development and review of a drug to "fill an unmet medical need", GSK explained. "The designation was requested based on the potential for bepirovirsen to address an unmet medical need for CHB, a serious and life-threatening condition. Data from the phase IIb trials B-clear and B-sure, which evaluated the efficacy, safety and durability of response of bepirovirsen in people with CHB, were submitted in support of the application. A confirmatory phase III programme, B-Well, is ongoing," GSK said.
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Retailer Frasers Group announced a share buyback. The Sports Direct owner plans to repurchase no more than GBP80.0 million from the programme, which kicks off on Monday and concludes on April 28. The total number of shares that may be repurchased in the programme will be 10.0 million.
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COMPANIES - FTSE 250
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Tritax Big Box REIT said it has reached an "agreement on the key terms" of a possible all-share takeover bid for fellow FTSE 250 listing UK Commercial Property REIT. UK Commercial Property investors would stand to receive 0.444 of a new Tritax Big Box REIT shares for every UKCM share they own. Based on Tritax Big Box's closing share price on Friday, the deal would value UKCM at GBP924 million. UKCM shareholders would own 23% of the enlarged company. A tie-up would "bring together complementary logistics-oriented investment portfolios with a shared focus on resilient and growing income", Tritax Big Box said. Tritax Big Box said most of UKCM's board deems the possible offer sweet enough to recommend to shareholders, with the exception of Chair Peter Pereira Gray, however. UKCM shareholders Phoenix Life and Investec Wealth & Investment UK, which own just under 57% of UKCM shares, would also back a bid on these terms.
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OTHER COMPANIES
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Galliford Try has landed a place in a GBP3.2 billion affordable homes framework in the UK. The construction firm said it has won a place on lot 2 of an eight-year Communities & Housing Investment Consortium framework worth GBP2.5 billion, and lot 3, which is worth GBP650 million. Lot 2 includes new build projects and Lot 3 regeneration work.
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By Eric Cunha, Alliance News news editor
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