London pre-open: Stocks seen higher as investors eye central bank updates
London stocks were set for a firmer open on Monday, taking their cue from an upbeat session in Asia as investors look ahead to a week of central bank updates.
The FTSE 100 was expected to open 32 points higher at 7,425.
CMC Markets analyst David Madden said: “The Federal Reserve are tipped to hike interest rates by 0.25% to 1.5% on Wednesday. The markets have been pricing in this rate for some time now. The press conference that follows could provide us with limited clues to what the Fed will do in 2018, because the mark-up of the US central bank will be very different. For now, traders are talking about three, or perhaps four interest rate hikes in 2018.
“On Thursday, we will hear from the Swiss National Bank, the Bank of England and the European Central Bank. The BoE announcement is likely to be uneventful following last month’s very dovish hike. No change is expected at the ECB either.”
There are no major UK data releases due.
In corporate news, global thread maker Coats said it had bought US specialist yarn manufacturer Patrick Yarn Mill for $21m with a further $4m on the table subject to performance targets.
Investec reassured investors that it has "immaterial exposure" to embattled South African retail giant Steinhoff International, which caused alarm for its lenders after its shares fell 80% last week.
Investec explained that it does have credit exposures to the Steinhoff Group but that this is mostly to Steinhoff Africa and represents less than 3.0% of South Africa subsidiary Investec Bank's total tier-one capital and so less than 1.5% of the Investec Plc's capital.
Spirit Energy, the exploration and production joint venture which combines Centrica’s E&P business with Bayerngas Norge, has begun trading as an independent oil and gas operator, it announced on Monday.
Completion of the transaction - which was announced on 17 July - followed receipt of all the required regulatory approvals, and Spirit Energy was now a “leading independent European exploration and production company”, according to Centrica. Centrica owns 69% of Spirit Energy, with Bayerngas Norge's former shareholders - led by Stadtwerke München Group - owning 31%.