(Alliance News) - Stocks in London are set to open higher on Wednesday as traders look ahead to the latest inflation readings from the UK and the eurozone, and what they would mean for the Bank of England and European Central Bank.
The former is already grappling with bond market turmoil, which has delayed plans for a gilt sale.
IG says futures indicate the FTSE 100 index of large-caps to open 30.5 points, 0.4%, higher at 6,967.24 on Wednesday. The blue-chip index rose 16.50 points, or 0.2%, on Tuesday, giving back stronger earlier gains to close at 6,936.74.
Despite popping above the 7,000 mark for the first time in over a week - doing so twice on Tuesday - the blue-chip index slid closer and closer toward the no-change mark as the session dragged on.
A rise above 7,000 points is not out of the question on Wednesday, but a batch of inflation data from the UK and the eurozone has the potential to spook markets.
"We can expect to see a positive European open, with the focus today set to be on inflation levels in the UK and the EU for September. Today's inflation numbers are likely to feed into a narrative of bigger rate rises from the ECB next week, and the Bank of England in early November, at a time when bond yields have continued to rise, and the UK market has been beset by political turmoil," CMC Markets analyst Michael Hewson commented.
The UK's annual inflation rate is expected to have hit double-figures again in September, after slowing to 9.9% in August. The eurozone's yearly inflation rate is expected to be confirmed at 10% for September.
The UK inflation reading is released at 0700 BST, before the eurozone's at 1000 BST. Elsewhere, the economic calendar has US housing starts at 1330 BST.
Ahead of the inflation reports, the euro traded at USD0.9838 early Wednesday UK time, firm from USD0.9826 at the time of European equities close on Tuesday. The pound rose to USD1.1317 from USD1.1291.
The Bank of England has said it will delay the sale of government bonds to November 1 due to the fiscal announcement later this month. The central bank had been due to start selling new UK government bonds, called gilts, on October 31.
The announcement came after the bank denied a report earlier on Tuesday that it would postpone the bond sale programme in an attempt to allow battered gilt markets to recover following the UK government mini-budget chaos.
Stocks in Asia were mixed on Wednesday. In China, the Shanghai Composite was down 1.0%, while the Hang Seng in Hong Kong was 1.7% lower. The Nikkei 225 rose 0.6% in Tokyo, while the S&P/ASX 200 added 0.3%.
In New York on Tuesday, the Dow Jones Industrial Average and the S&P 500 each closed up 1.1%, while the Nasdaq Composite added 0.9%.
The dollar rose to JPY149.30 early Wednesday, from JPY149.24 late Tuesday.
Gold traded at USD1,647.28 an ounce, down slightly from USD1,647.70. A barrel of Brent oil rose to USD90.21, from USD88.97.
President Joe Biden will announce Wednesday that he is putting the final 15 million barrels on the market from a record release of US strategic oil reserves, with more releases possible if energy prices spike, a senior US official said.
The new tranche of oil from the Strategic Petroleum Reserve will be "completing the 180 million barrel release authorized in the spring," in response to price hikes linked to Russia's invasion of Ukraine, a senior US official said Tuesday.
The order, which Biden will announce in a speech, means the president will be "making clear that the administration is prepared to undertake significant additional...sales this winter if they are needed due to Russian or other actions disrupting global markets," the official added.
In the local corporate calendar, online retailer Asos issues full-year results.
Already out, Just Eat Takeaway.com said it was profitable in the third quarter of 2022, beating expectations.
The food delivery company said it was adjusted earnings before interest, tax, depreciation and amortisation positive in the third quarter of 2022. This was an outcome "materially ahead of prior guidance at the beginning of the year".
JET now expects to be adjusted Ebitda positive in the second half, having previously expected an adjusted Ebitda margin in the range of minus 0.5% and minus 0.7%.
The profitable quarter came despite total orders falling 11% year-on-year to 235.3 million. Total gross transaction value improved 2%, however.
"Management expects the company to maintain positive adjusted Ebitda in 2023, and the long-term objectives for Just Eat Takeaway.com remain unchanged," the company said.
By Eric Cunha; ericcunha@alliancenews.com
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Just Eat Takeaw (JET)