Markets

What you need to know before the open

Today's top story: Tories face fresh row over Brexit as Rees-Mogg attacks government

Continued downward pressure on sterling is likely to drive UK stocks higher this morning, with the FTSE 100 eyeing the landmark 8,000-point barrier.

Britains blue-chip index is expected to open 18 points up at 7,859 according to analysts. Germans Dax is also seen 18 points higher at 13,151 and Frances Cac is called seven points ahead at 5,633.

US President Donald Trump appeared to pour cold water on a cessation of trade hostilities with China overnight. Despite treasury secretary Steven Munchins remarks late on Sunday that the trade war was “on hold”, Trump indicated he was not pleased with status of recent talks.

His comments spooked Wall Street first and bled onto Asian indices. The MSCI Asia-Pacific excluding Japan fell 0.2 per cent while Japans shares slumped 1.4 per cent.

Sterling is languishing at $1.33, even though Bank of England governor Mark Carney yesterday suggested six interest rate rises could be on the cards between now and 2021

LCG analyst Jasper Lawler said: “Traders will now look for inspiration from todays inflation figures. Last month inflation unexpectedly fell to 2.5 per cent igniting a selloff in the pound as investors slashed the odds of the BoE hiking rates at the May meeting.

“Whilst [consumer price index] CPI is expected to remain constant in April at 2.5 per cent, core inflation which removes the more volatile items, such as food and fuel is expected to tick lower to 2.2 per cent from 2.3 per cent in March.”

Corporate news

  • Rio Tinto – in talks with Grasberg over copper stake sale
  • Caterpillar – US firm is struggling to keep up with demand
  • Royal Dutch Shell – Norwegian wealth fund votes in favour of executive pay
  • Softbank – to sell Flipkart stake to Walmart

Data

  • 09:30 – UK inflation figures (April)
  • 09:30 – Producer price index (April)
  • 14:45 – US Markit services PMI
  • 19:00 – US federal reserve minutes

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