(Alliance News) - Share prices in London were set to open slightly higher on Monday, in a muted response to Friday's tech-stock-led rally on Wall Street.
IG says futures indicate the FTSE 100 index of large-caps to open up 14.2 points, or 0.2%, at 7,784.79 on Monday. The FTSE 100 index closed up 23.30 points, 0.3%, at 7,770.59 on Friday.
The dollar was mostly weaker against major currencies, after some less hawkish rhetoric from the Federal Reserve on Friday.
Sterling was quoted at USD1.2415 early Monday, higher than USD1.2379 at the London equities close on Friday. The euro traded at USD1.0888, firm from USD1.0837. The single currency hit USD1.0905 earlier in the session - marking a nine-month high since it was trading at around USD1.0936 last April.
Against the yen, the dollar was quoted at JPY129.99, up slightly versus JPY129.88.
"Importantly, US inflation continues to slink lower, paving the way for a more amenable Fed outlook," SPI Asset Management's Stephen Innes.
Federal Reserve Governor Christopher Waller said Friday there is ample evidence that a steep climb in interest rates has damped demand and economic activity, and suggested the US central bank can further slow its rate hikes.
The Fed had been raising rates a pace of three quarters of a percentage point at a time before slowing this to half a percentage point at its December policy meeting.
Alongside recent data showing a slowing in US economic activity, inflation moderated to 6.5% in December, from the 40-year high seen in June last year.
Waller warned that policymakers have "a considerable way to go" towards their 2% inflation goal, noting that the recent cooling was largely led by the drop in energy prices.
Core inflation - which excludes volatile food and energy segments - ticked up from November to December, signalling cause for caution, Waller noted.
The core index rose by 0.3% in December from November, picking up pace from a 0.2% monthly rise in November. On an annual basis, however, core inflation slowed to 5.7% in December from 6.0% in November.
In the US on Friday, Wall Street rallied, with the Dow Jones Industrial Average ending up 1.0%, the S&P 500 up 1.9% and the Nasdaq Composite up 2.7%.
"With debt ceiling issues roiling, a possible pushback from the Fed, high valuations, and companies representing 25% of the S&P 500 market cap reporting this week, investors' top-side ambitions could be limited until we clear the swath of earnings report and [Federal Market Open Committee] hurdles," SPI's Innes said.
It's set to be a quieter trading week in Asia, with Chinese markets shut to mark the Lunar New Year. The Hang Seng in Hong Kong will reopen on Thursday, while the Shanghai Composite will remain closed all week.
In Japan on Monday, the Nikkei 225 index closed up 1.3%, while the S&P/ASX 200 in Sydney closed up 0.1%.
"Japanese and Australian stocks are picking up on the better mood from US investors and on expectations of China's economy returning to some semblance of a pre-pandemic trend, which will positively affect the local economies and boost regional corporate earnings," SPI's Innes said.
Gold was quoted at USD1,923.81 an ounce early Monday, edging down from USD1,925.41 on Friday, while Brent oil fetched USD87.52 a barrel, up a touch from USD86.55.
Monday's local corporate calendar has half-year results from cannabinoid medicines-focused firm Oxford Cannabinoid Technologies and a trading statement from Tritax Big Box REIT.
In the economic calendar on Monday, there is flash EU consumer confidence at 1500 GMT. This week picks up the pace with a series of flash PMIs on Tuesday and a Bank of Canada interest rate announcement on Wednesday.
By Elizabeth Winter, Alliance News senior markets reporter
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