(Alliance News) - Stocks in London are set to open higher on Wednesday, in a sign of cautious optimism ahead of the latest interest rate decision from the US.
IG says futures indicate the FTSE 100 to open up 25.5 points, 0.4%, at 7,347.22 on Wednesday. The index of London large-caps closed down 5.67 points, 0.1%, at 7,321.72 on Tuesday.
The US Federal Reserve is widely anticipated to leave interest rates where they are at its November meeting, and will be hoping that the recent rise in bond yields will help to do some of the heavy lifting. The decision will be announced at 1800 GMT.
"Fed Chair Jay Powell, in comments made just before the blackout, appeared to indicate that a status quo hold is the most likely outcome at today's meeting, with the key message continuing to be higher for longer. This is certainly being reflected in market pricing especially in the longer dated part of the treasury curve, as the yield curve continues to un-invert," said CMC Markets' Michael Hewson.
Sterling was quoted at USD1.2142 early Wednesday, higher than USD1.2128 at the London equities close on Tuesday. The euro traded at USD1.0572, higher than USD1.0562.
Against the yen, the dollar was quoted at JPY151.28, down versus JPY151.63.
The yen found some strength after Japan's top currency official said that Tokyo was "on standby" to intervene after the yen fell to a new year-low against the dollar and plunged against the euro, Bloomberg reported.
"We're on standby," currency official Masato Kanda told reporters, according to Bloomberg News. "But I can't say what we'll do, and when – we'll make judgements overall, and we're making judgements in a state of urgency."
In Japan on Wednesday, the Nikkei 225 index in Tokyo was closed up 2.4%. Toyota closed up 4.7%, as the carmaker increased its annual profit forecast, crediting cost-cutting efforts and a weaker yen.
In China, the Shanghai Composite was up 0.2%, while the Hang Seng index in Hong Kong was down 0.2%. The S&P/ASX 200 in Sydney closed up 0.9%.
Chinese manufacturing returned to a mild state of contraction in October, survey data revealed. The Caixin manufacturing purchasing managers' index fell to 49.5 points in the month from 50.6 in September. Falling below the 50-point no-change mark, it shows activity fell in the sector.
In the US on Tuesday, Wall Street ended higher, with the Dow Jones Industrial Average down 0.4%, the S&P 500 up 0.7% and the Nasdaq Composite up 0.5%.
Gold was quoted at USD1,980.51 an ounce early Wednesday, lower than USD1,989.19 on Tuesday.
Brent oil was trading at USD85.25 a barrel, down from USD86.09.
In Wednesday's UK corporate calendar, pharmaceutical firm GSK reports third-quarter results and retailer Next and mining technology firm Weir release trading updates.
Wednesday's global economic calendar has further manufacturing PMIs from the UK and the US.
By Elizabeth Winter, Alliance News senior markets reporter
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