(Alliance News) - Stocks in London are set to open slightly lower on Wednesday, ahead of the next rate decision from the US Federal Reserve, due after the European market close.
IG says futures indicate the FTSE 100 to open 6.58 points, or 0.1%, lower at 7,588.20 on Wednesday. The FTSE 100 index closed up 24.09 points, 0.3%, at 7,594.78 on Tuesday.
The Fed announces its latest interest rate decision at 1900 BST on Wednesday. A press conference with Chair Jerome Powell follows at 1930 BST.
According to the Bureau of Labor Statistics on Tuesday, the US annual consumer price inflation rate eased to 4.0% last month from 4.9% in April. The figure for May came in shy of market consensus of 4.1%.
The cooler-than-expected headline inflation number boosted expectations that the US central bank will hold interest rates steady on Wednesday. Markets now see a 90% chance of rates staying where they are, according to the CME FedWatch Tool.
Last week, markets saw just a 73% chance of this outcome.
Wall Street ended higher on Tuesday in the wake of the data and increasing confidence that the Fed will pause its rate rises.
The Dow Jones Industrial Average closed up 0.4%, the S&P 500 up 0.7% and the Nasdaq Composite up 0.8%.
Michael Hewson, chief market analyst said that Wednesday's US producer price index figures for May are "only likely" to reinforce this "more dovish tilt" as markets expected to see further evidence of slowing prices.
The US producer price data is released at 1330 BST, before the New York market open. The Fed decision will come during US market hours.
The dollar was mixed as the US central bank's decision loomed.
Sterling was quoted at USD1.2613 early Wednesday, firm from USD1.2609 at the London equities close on Tuesday. The euro traded at USD1.0788, lower than USD1.0795. Against the yen, the dollar was quoted at JPY140.04, unchanged from JPY140.05 on Tuesday.
In Asian markets on Wednesday, Tokyo was leading the way. The Nikkei 225 index was up 1.8%. In China, the Shanghai Composite was up 0.1%, while the Hang Seng index in Hong Kong was down 0.4%.
The S&P/ASX 200 in Sydney closed up 0.3%.
Brent oil was trading at USD74.66 a barrel early Wednesday, higher than USD73.98 late Tuesday. Gold was quoted at USD1,948.00 an ounce, up from USD1,944.33 on Tuesday.
In Wednesday's corporate calendar, there are half-year results from Safesore and full-year results from Motorpoint.
Late on Tuesday, Ladbrokes owner Entain said Entain Holdings (CEE), its Central and Eastern Europe operation, alongside its joint venture partner, has agreed to wholly acquire STS.
STS is Poland's leading sports-betting operator.
Entain said it will fund 75% of its acquisition, while EMMA - CEE's joint venture partner - will fund the remaining 25%, in proportion to both companies' current shareholdings in STS.
By Heather Rydings, Alliance News senior economics reporter
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