FTSE 100 called higher ahead of US PCE data

(Alliance News) - Stocks in London are set to open higher on Friday, ahead of a key US inflationary reading, while data showed an improvement in UK consumer confidence this month.

IG says futures indicate the FTSE 100 index of large-caps to open up 23.0 points, 0.3%, at 7,930.72 on Friday. The FTSE 100 index closed down 22.91 points, 0.3%, at 7,907.72 on Thursday.

UK consumer confidence has made a surprise rebound from historic lows despite ongoing cost-of-living woes, a figure showed.

GfK's long-running consumer confidence index rose by a significant seven points in February, although the headline score remains at a "severely depressed" negative 38.

Joe Staton, client strategy director at GfK, said: "Despite widely reported headwinds of inflation continuing to outstrip wage rises, and the ongoing household challenge from the cost-of-living crisis, consumers have suddenly shown more optimism about the state of their personal finances and the general economic situation, especially for the coming year."

Stocks in New York closed in the green on Thursday, with the Dow Jones Industrial Average ending up 0.3%, the S&P 500 up 0.5% and the Nasdaq Composite 0.7% higher.

The dollar was slightly softer against major currencies.

Sterling was quoted at USD1.2020 early Friday, little changed from USD1.2023 at the London equities close on Thursday. The euro traded at USD1.0600, edging up from USD1.0593. Against the yen, the dollar was quoted at JPY134.66, down versus JPY134.72.

In Asia on Friday, the Nikkei 225 index closed up 1.3%.

Japan's consumer prices rose 4.2% in January from a year earlier, a level not seen since September 1981, fuelled in part by higher energy bills.

The Bank of Japan's long-standing monetary easing policies are "appropriate", its next governor Kazuo Ueda told parliament, suggesting no sudden changes to the bank's stance when he takes the helm in April.

In China, the Shanghai Composite was down 0.5%, while the Hang Seng index in Hong Kong was down 1.2%. The S&P/ASX 200 in Sydney closed up 0.3%.

Gold was quoted at USD1,825.03 an ounce early Friday, higher than USD1,821.05 late Thursday. Brent oil was trading at USD82.87 a barrel, higher than USD81.71.

Friday's economic calendar has US core personal consumption expenditures data at 1330 GMT.

"Today the major focus will be US personal consumption expenditure and savings data from which the Fed draws its favourite measures of inflation, the headline and core PCE deflators," analysts at Rabobank commented.

Core PCE is expected to fade to 4.3% in January, from 4.4% in February.

Rabobank added: "The latter in no way argues for a rate pivot, even if it would be down from 4.4% in December. However, expect siloed bean-counters to zero in on any decimal-place rounding down as a risk on signal – even as the calendar points to how wrong such big picture calls have been for a year now, both on geopolitics and on the Fed."

The local corporate calendar has annual results from British Airways parent International Consolidated Airlines Group and half-year numbers from veterinary services provider CVS Group.

By Elizabeth Winter, Alliance News senior markets reporter

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