London Markets Anticipate Opening Down Amid US Inflation Focus and UK Jobs Data
As London braces for Tuesday’s trading session, market indicators suggest an opening dip in stocks.
The FTSE 100 is expected to open approximately 10 points lower at 7,416, with investors closely monitoring the impending US inflation data and scrutinising the latest UK jobs statistics.
Earlier reports from the Office for National Statistics (ONS) unveiled insights into the UK’s labour market. Wage growth in the three months to September witnessed a slight deceleration, yet earnings growth outpaced inflation. The average wage growth, inclusive of bonuses, receded to 7.9%, compared to the previous month’s upwardly revised 8.2%. This stands in contrast to the inflation rate of 6.7%, surpassing economists’ projections of a decline to 7.4%.
Discounting bonuses, wage growth also exhibited a modest easing, recording 7.7% in the same period, down from 7.8%. Concurrently, the unemployment rate maintained its stability at 4.2%. The ONS affirmed that labour market figures indicated a predominantly unaltered landscape, with marginal shifts in the proportions of employed, unemployed, and those not actively seeking employment.
Despite a 16-month continuous decline in job vacancies, the numbers remain notably above pre-lockdown levels. In a noteworthy development, real pay has surged at its fastest pace in two years, aligning with the alleviation of inflation pressure in the latest quarter.
Looking forward, market participants eagerly await the release of the US Consumer Price Index for October at 1330 GMT. Analysts underscore the significance of these figures, considering that Fed funds futures currently imply an 85% likelihood of the Federal Reserve refraining from a rate hike in its December meeting. A drastic deviation in inflation data may influence these expectations.
In corporate updates affecting London’s FTSE 100-listed stocks, Vodafone Group reported a 4.2% upswing in first-half group service revenue, primarily driven by robust performance in Europe and Africa. However, fluctuations in foreign exchange rates and prior-year business disposals led to a 4.3% decline in group revenue and a substantial 44.2% drop in operating profit. Despite these challenges, Vodafone maintained its full-year guidance and declared an interim dividend per share of 4.5 euro cents.
Imperial Brands, a tobacco giant, disclosed that lower tobacco volumes offset by strong growth in next-generation products resulted in flat full-year revenues. The reported revenues for the twelve months ending September 30 totaled £32.5 billion, reflecting a marginal 0.2% year-on-year decline. Excluding Russian operations in the prior-year comparator, tobacco and NGP net revenue grew by 1.4% at constant currency, comprising 0.7% growth in tobacco and an impressive 26.4% from NGP.
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