Portfolio

London pre-open: Stocks seen higher amid Fed rate cut hopes

By Michele Maatouk

Date: Friday 19 Jul 2019

London pre-open: Stocks seen higher amid Fed rate cut hopes

(Sharecast News) - London stocks were set to rise at the open on Friday, taking their cue from positive US and Asian sessions amid renewed hopes of more monetary easing from the US Federal Reserve.
The FTSE 100 was called to open 37 points higher at 7,530.

Danske Bank said: "Market sentiment turned swiftly positive yesterday as prominent FOMC board members of the New York Fed, Williams and Vice Chair Clarida, delivered very soft remarks highlighting the need for swift action before economic data actually turns for the worse. The remarks at first seemed very coordinated, driving a weaker USD, a drop in front US yields and a sharp rally in the August Fed funds futures, essentially leaving market pricing skewed towards a 50bp July cut rather than the consensus 25bp cut.

"Meanwhile, this morning, the New York Fed stressed that Williams had not tried to send a specific policy signal, leading to a rebound of more than half the initial drop in US 2Y swap rates, even if the USD FX gains were more modest with EUR/USD, for example, staying around 1.1260."

On home shores, public sector net borrowing figures are due out at 0930 BST.

In corporate news, Royal Bank of Scotland's chief executive, Ross McEwan, has been appointed to run National Australia Bank. McEwan, who announced his intention to leave in April, has a 12-month notice period and will stay at RBS until a replacement is in place.

Emergency household repairs business Homeserve said it was selling its 49% shareholding in its Italian associate, Assistenza Casa, to its partner Edison due to "limited opportunities" for customer growth.

International business development resources would be focused on the recently announced joint venture with Mitsubishi in Japan and prospecting "other more attractive markets", Homeserve said in a trading statement ahead of its annual shareholder meeting today.

It added that trading had been in line with guidance given in May. HomeServe continues to expect further strong growth in FY20, with increased investment in its Home Experts unit offset by strong performance in its Membership business, particularly in North America.

Merchant bank Close Brothers said it has continued to deliver a "solid" performance amid "mixed" trading conditions, with loan book growth in its banking division but lower trading volumes in its securities arm.

In a trading update ahead of its 2019 financial year end, the company said its banking division remains focused on maintaining pricing and underwriting discipline, and continued investment in its businesses for the long term. The loan book grew 5.1% year to date to £7.6bn as at 30 June 2019.



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