Finance

FTSE 100 Live: Markets steady after Fed minutes and US inflation


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he London market is poised for a steady session after it emerged yesterday that US policymakers are ready to taper vast economic support before the end of the year.

The latest Federal Reserve minutes and September’s US inflation figures failed to unsettle Wall Street, meaning the FTSE 100 index is expected to open as much as 35 points higher.

There’s no let up in current inflation pressures, however, with Brent crude oil and natural gas prices both creepting up overnight. In corporate news, Dunelm said recent sales growth had been encouraging as it stuck by the City’s recent increase to profit forecasts.

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Wall Street earnings

Banking giant JP Morgan Chase got Wall Street’s third quarter earnings season off to a strong start yesterday when it delivered forecast-beating results, driven by the recent boom in M&A activity and release of more loan loss reserves.

Net income rose 24% to $11.7 billion, aided by a 30% rise in revenues at its investment banking and markets division.

Chief executive Jamie Dimon said: “JPMorgan Chase delivered strong results as the economy continues to show good growth – despite the dampening effect of the Delta variant and supply chain disruptions.”

The shares have risen by 28% so far this year, but closed yesterday more than 2% cheaper amid a weaker performance across the banking sector.

Bank of America, Citigroup and Morgan Stanley are due to post their results later today.

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Inflation focus

European stock markets are expected to open higher this morning following a steady performance by US and Asian markets overnight.

The focus continues to be on inflation after it emerged that headline US consumer prices rose by 0.4% on a monthly basis in September, the fifth time in the last seven months that the figure has come in above the median estimate.

Deutsche Bank’s senior analyst Jim Reid said the CPI release only added to speculation that the Federal Reserve may be forced into hiking rates earlier than previously anticipated.

He added: “Investors are now pricing in almost four hikes by the end of 2023, which is over a full hike more than they were pricing in just a month earlier.”

The jitters were evident in markets overnight as the traditional inflation hedge of gold posted its strongest daily performance since March.

China bucked the inflation trend overnight with official figures showing a fall in the annual rate in September to 0.7% from 0.8%. This was offset, however, by a rise in the producer prices index to 10.7%, the highest since records began to show that inflationary pressures still persist in the China value chain.

Oil prices edged higher overnight to leave Brent crude futures at $83.73 and West Texas crude oil at $80.96.

The rise came despite OPEC’s monthly oil market report revising down its forecast for world oil demand this year. European natural gas prices were also up 9% as they continue to pare back some of the declines following Vladimir Putin’s intervention last week.

According to CMC Markets, the FTSE 100 index is forecast to open 35 points higher at 7,176.

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