London pre-open: Stocks to edge up ahead of data slew, Powell testimony
London stocks were set to edge up at the open on Wednesday as investors eyed a slew of UK data releases, a testimony by Federal Reserve chair Jerome Powell and minutes from the latest Fed meeting.
The FTSE 100 was called to open nine points higher at 7,545.
On the data front, UK industrial production and manufacturing figures are due at 0930 BST, along with trade balance and gross domestic product for May. Market participants will also be eyeing Powell’s semi-annual monetary policy testimony at 1500 BST.
"He is expected to keep the possibility of an interest rate cut on the table despite the latest rebound in US nonfarm payrolls data," said Ipek Ozkardeskaya, senior market analyst at London Capital Group.
"Powell will probably repeat that the Fed will ‘act appropriately’ to prevent the economy from slowing amid US-China trade tensions. US policymakers will likely question the Fed’s action plan beyond its July meeting, when it is expected to lower the interest rates by 25 basis points. Powell may well leave the door open for further rate cuts, without however precising when and by how much. This is the beauty of the ‘act as appropriate’ formula."
The FOMC minutes will be released at 1900 BST.
In UK corporate news, DIY company Grafton said first half group revenue increased by 2.4% £1.48bn, with like-for-like revenue up 3.9%, although there were signs of weaker UK markets in May and June due to Brexit concerns.
The company, which operates in the UK, Ireland, Belgium and the Netherlands, said group trading in May and June was measured against very strong prior year comparatives, while Britain saw weaker demand in the residential repair, maintenance and improvement and house building markets at the end of the period.
Barratt Developments hailed a "record" full-year performance, with pre-tax profit expected to come in above market expectations.
In an update for the year to 30 June 2019, the housebuilder said wholly-owned completions edged up 2.6% to 17,111 homes. Meanwhile, pre-tax profit is anticipated to be ahead of market expectations of £884m, at around £910m. This is up from £835.5m in 2018 and driven by continued strong progress from margin initiatives, a solid close to the year and additional contribution from joint ventures.
GlaxoSmithKline announced that ViiV Healthcare, its majority-owned global specialist HIV company also held by Pfizer and Shionogi, had seen positive week 48 results from its phase III ‘TANGO’ study, which assessed whether adults living with HIV-1 who had maintained viral suppression for at least six months on a ‘tenofovir alafenamide’ fumarate-containing regimen of at least three drugs were able to maintain similar rates of viral suppression after switching to the two-drug regimen of ‘dolutegravir’ plus ‘lamivudine’.
The FTSE 100 pharmaceuticals firm said the study met its primary endpoint for non-inferiority, and no patients met confirmed virologic withdrawal criteria or developed treatment resistance.