LONDON (Alliance News) - UK stocks are set to open broadly flat Thursday with little in the data calendar until the afternoon and markets winding down into the long Easter weekend, while the pound is trading at fresh multi-year highs against the dollar heading into the equity market open.
US markets posted solid gains on Wednesday, buoyed by doveish comments from Federal Reserve Chair Janet Yellen who once again reiterated her stance that the central bank intends to remain highly accommodative until employment and inflation reach higher levels, which could be well after the bank has finished winding down its asset buying programme.
"It was Janet Yellen?s comments about the weak outlook for inflation that appear to have helped underpin stocks the most, and raised the prospect of lower rates well beyond the end of the actual tapering program," said CMC Markets chief market analyst Michael Hewson.
Japanese consumer confidence fell to its lowest level since August 2011 in March, according to a survey from the Japanese cabinet office overnight. The consumer sentiment index fell to seasonally adjusted 37.5 in March from 38.5 in February.
Even so, stable Asian markets are providing little in the way of direction for the European open Thursday, with the Japanese Nikkei up 0.2%, the Hang Seng up 0.4%, and the Shanghai Composite down 0.1%.
Spreadbetters are indicating a quiet open to UK equities, with the FTSE 100 seen opening marginally lower at 6,580 points.
German producer prices fell 0.9% year-on-year in March, according to official PPI data released Thursday. The price decline is bigger than the 0.7% expected by economists and unchanged from February. On a monthly basis prices fell by 0.3%, while economists has expected them to remain stable.
Even so, the euro remains well supported against the dollar, currently trading at the upper end of its tight weekly range at USD1.3845.
Yellen's insistence that rates in the US are staying low for some time to come appears to have been the catalyst needed for the pound to reach a new four-and-a-half year high against the dollar, after failing to break resistance on Wednesday. Ahead of the equity market open the pound has made a fresh high of USD1.6837.
It's a quiet day in the economic calendar ahead, with just the latest mortgage lending data from the Council of Mortgage Lenders at 0930 GMT of interest in the UK, and nothing else from Europe before the long weekend.
From the US; initial jobless claims will be released at 1230 GMT, followed by the Philadelphia Fed manufacturing survey at 1400 GMT.
From UK corporates, Diageo has released an interim trading statement that shows continued weakness in emerging markets, while Mulberry has issued another profit warning. Interim trading statements are also already out from Ferrexpo, Sepura, Lavendon Group, and Haynes Publishing.
By Jon Darby; jondarby@alliancenews.com; @jondarby100
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