LONDON (Alliance News) - London stocks are forecast to open lower Friday, still spooked by the Swiss National Bank which surprised markets Thursday by removing its exchange rate peg to the euro, a move that suggests the European Central Bank could introduce planned stimulus measure as early as next week.
The FTSE 100 is forecast to open 59 points lower at 6,439.6, down from Thursday's close of 6,498.78.91. The index closed up 1.7% in volatile trading on the prospect of broader stimulus measures being introduced to kickstart the moribund European economy after the Alpine nation's central bank removed its CHF1.20 floor for the euro and lowered its deposit rate to minus 0.75%.
"The SNB must have a very strong inclination that the European Central Bank is about to begin a large scale quantitative easing program which would act to depreciate the euro and make a defence of the Swiss franc peg impossible," said Jasper Lawler at CMC Markets.
Before the SNB action, the European Court of Justice gave a positive assessment of the ECB's so-called Outright Monetary Transactions programme, clearing the way for ECB President Mario Draghi to launch a government bond-buying programme, possibly as early as next week when the ECB policy-making council meets for the first time this year.
Inflation figures from Germany and the euro area on Friday will provide further insight into the likely timing of broader stimulus measures.
German December CPI was reported up 0.2% on the year, flat on the month, both unrevised.
Eurozone data is due at 1000 GMT and both sets of data follow figures from Spain which showed the country fell further into deflation in December, with consumer prices falling 0.6% month-on-month from a fall of 0.4% in November.
Brent crude is quoted at around USD48.35 a barrel Friday, up again after touching a new six-year low of USD45.16 during Tuesday's session. US benchmark West Texas Intermediate was quoted at USD46.93 a barrel, up from a low on Tuesday of USD44.17.
US consumer price inflation is due at 1330 GMT, December industrial production at 1415 GMT, and the Reuters/University of Michigan consumer sentiment index reading for January due at 1455 GMT.
In corporate news, trading statements are out from MoneySupermarket.com and JD Sports Fashion.
Japan's Nikkei closed down 1.4% at 17,108.7 as the SNB move took its toll on Asian stocks. The Hang Seng in Hong Kong is down 0.7% at 24,170.33.91, but the Shanghai Composite is 1.4% higher at 3,381.723.
By Ian Edmondson; ianedmondson@alliancenews.com
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