(Alliance News) - Stocks in London are set to open lower on Tuesday, as second-quarter earnings season continues in the US, with Bank of America and Morgan Stanley due to report before the New York open.
IG says futures indicate the FTSE 100 in London to open 16.5 points lower on Tuesda. The index of London large-caps closed down 69.95 points, 0.9% at 8,182.96 on Monday.
Frankfurt also was called to open lower, but Paris slightly higher.
Sterling was quoted at USD1.2959 early Tuesday, slightly lower than USD1.2984 at the London equities close on Monday.
UK Business Secretary Jonathan Reynolds on Tuesday will say a "confident, outward-looking" UK is "open for business" at the G7 trade ministers' meeting. He will set out the new Labour government's strategy to reset relations and remove barriers to trade during his first international visit as Business & Trade secretary.
The trip comes in the same week that the new EU relations minister heads to Brussels, and Prime Minister Keir Starmer hosts the European Political Community summit at Blenheim Palace.
The euro traded at USD1.0889, down from USD1.0912 late Monday in London. Against the yen, the dollar was quoted at JPY158.74, up from versus JPY157.85.
In the US on Monday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.5%, the S&P 500 up 0.3% and the Nasdaq Composite up 0.4%.
US Federal Reserve Chair Jerome Powell said Monday that recent data lifts the central bank's confidence that inflation is coming down towards its 2% target – a trend that signals interest rate cuts on the horizon.
"We didn't gain any additional confidence in the first quarter but the three readings in the second quarter, including the one from last week, do add somewhat to confidence," Powell said in an interview with David Rubenstein of the Economic Club of Washington DC.
While the central bank has focused largely on inflation – which surged in the wake of the pandemic – it is now also closely monitoring its mandate of promoting maximum employment, Powell added.
"If we were to see an unexpected weakening in the labour market, then that might also be a reason for reaction by us," he said.
In the UK, a Bank of England rate-setter said interest rates should be cut in order to stop squeezing the living standards of British households. Swati Dhingra, a member of the UK central bank's nine-strong Monetary Policy Committee, said "now is the time" for a reduction in the bank rate.
UK interest rates are currently at a 16-year-high of 5.25% after they were increased in a bid to tackle soaring inflation.
Equities market were mixed in Asia on Tuesday. The Nikkei 225 index in Tokyo was up 0.3%. In China, the Shanghai Composite also was up 0.3%, but the Hang Seng index in Hong Kong was down 1.2%. The S&P/ASX 200 was down 0.2% near the close in Sydney.
In commodities markets, gold was quoted at USD2,430.80 an ounce early Tuesday in London, down from USD2,436.88 late Monday. Brent oil was trading at USD84.49 a barrel, down from USD84.83.
Tuesday's economic calendar has US retail sales data at 1330 BST.
The London corporate diary has half-year earnings from grocer and warehouse technology firm Ocado and discount store chain B&M European Value Retail. There are full-year results due from building products suppler Brickability.
Trading statements are expected from miner Rio Tinto and credit checking firm Experian.
By Tom Waite, Alliance News editor
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