London pre-open: Stocks on front foot as pound retreats
London stocks are expected to move higher in early trade on Tuesday, continuing positive sessions on Wall Street and Asia, along with a lower pound after another night of Brexit deadlock.
Ahead of the opening bell, the FTSE 100 was being called almost 20 points higher by traders in the City.
Overnight, in New York the S&P 500 surged to its highest level since October on the back of encouraging domestic data and from China.
"Traders are growing increasingly optimistic that the world’s two largest economies are starting to stabilise, amid better recent data prints," said market analyst Jasper Lawler at London Capital Group. "US treasury yields increased by the most in three months following the double whammy of stronger manufacturing data. Yields on 10 year bonds have now gained considerably since their inversion just a week or so go."
The pound fell overnight after none of softer Brexit options voted on in the House of Commons as an alternative to Theresa May’s Brexit plan managed to achieve a majority.
Sterling was at 1.3068 against the dollar and 1.1646 versos the euro.
"This basically casts an even greater shadow over an already very grey situation," said Lawler. "With just 10 days to go until the UK leaves the EU, ministers failing to agree to an alternative plan increases the probability of a no deal Brexit. This fact is being reflected in a weaker pound."
Theresa May is due to hold a mammoth five-hour cabinet meeting on Tuesday, with half her ministers again pressing her to switch to a softer Brexit involving a customs union and some of the others push for a decisive no-deal exit from Europe.
The Prime Minister is expected to try and bring back her Brexit deal for a fourth and final vote in the Commonsr this week or threaten a general election to break the impasse.
In terms of economic data, the UK construction PMI survey is due at 0930 BST.
In company news, BHP Group said it is reviewing production and cost guidance for 2019 after a cyclone caused flooding at its iron ore operations in Western Australia. The miner said its early estimate is that production will be 6m to 8m tonnes lower than expected.
Galliford Try's regeneration arm has signed an agreement with Homes England to build more than 850 homes across the UK. Alongside the government’s housing accelerator, Galliford Try Partnerships will deliver housing in Redcar, Cheshire, Staffordshire and Dorset.
Low-cost airline Wizz Air saw its capacity rise by 6.9% year-on-year in March, to 2.893 million seats, while its total passenger numbers were ahead 9.9% at 2.722 million, making for a load factor of 94.1%. The FTSE 250 company said on Tuesday that it announced 15 new routes during the month, and took delivery of two new Airbus A321neo and two A321ceo aircraft.