(Alliance News) - Stocks in London are set to open marginally lower on Tuesday, amid a series of economic data from major economies and as the Australian central bank pauses rates.
On Tuesday's economic calendar, there is a slew of manufacturing purchasing managers' index readings as the day progresses, including the eurozone at 0900 BST, the UK at 0930 BST and the US at 1545 BST.
IG says futures indicate the FTSE 100 to open down 2.31 points at 7,697.1 on Tuesday. The index of London large-caps closed up 5.14 points, 0.1%, at 7,699.41 on Monday.
The Reserve Bank of Australia left its key interest rate unchanged Tuesday, with the central bank saying previous hikes were "working" but the outlook was uncertain.
The pause is the second in a row, following a string of rises aimed at taming runaway prices. The central bank left the cash rate target at 4.10% and the interest rate paid on exchange settlement balances unchanged at 4.00%.
"The higher interest rates are working to establish a more sustainable balance between supply and demand in the economy and will continue to do so. In light of this and the uncertainty surrounding the economic outlook, the board again decided to hold interest rates steady this month," said RBA Governor Philip Lowe.
The move was contrary to market expectations, with FXStreet-cited market consensus expecting a 25 basis point rate hike.
There were also some PMI prints overnight from Australia, China and Japan.
Australia's manufacturing sector remained in a downturn over July, but stabilised slightly from the prior month. The Judo Bank manufacturing PMI rose to 49.6 in July from 48.2 in June, signalling the fifth consecutive month of decline.
China's manufacturing sector fell into a mild state of contraction in July, according to survey data. The Caixin manufacturing purchasing managers' index fell to 49.2 points in July from 50.5 in June. Crossing over the 50-point mark that separates growth from contraction, it shows the sector saw a mild downturn.
Japan's manufacturing sector saw a marginal deterioration over July. The au Jibun Bank manufacturing PMI eased to 49.6 in July from 49.8 in June.
In Asia on Tuesday, the Nikkei 225 index in Tokyo was up 0.9%. In China, the Shanghai Composite was down 0.2%, while the Hang Seng index in Hong Kong was down 0.4%. The S&P/ASX 200 in Sydney was up 0.5%.
Moving away from PMI readings, price inflation in the UK decelerated in July hitting its lowest level this year as retailers mitigated the wet weather by offering larger discounts.
According to the latest British Retail Consortium-NielsenIQ tracker, annual shop price inflation cooled to 7.6% in July, down from 8.4% in June. This is below the three-month average rate of 8.4%, taking shop price inflation to its lowest level this year.
Helen Dickinson, chief executive of the BRC, said: "Shop price inflation fell to its lowest level of 2023 and, for the first time in two years, prices fell compared to the previous month."
Sterling was quoted at USD1.2825 early Tuesday, lower than USD1.2860 at the London equities close on Monday. The euro traded at USD1.0991, lower than USD1.1027. Against the yen, the dollar was quoted at JPY142.77 versus JPY142.12.
In the US on Monday, Wall Street ended mixed, with the Dow Jones Industrial Average down 0.3%, whilst the S&P 500 and the Nasdaq Composite were both up 0.2%.
Gold was quoted at USD1,959.11 an ounce early Tuesday, lower than USD1,969.90 on Monday. Brent oil was trading at USD85.06 a barrel early Tuesday, little changed from USD85.08 late Monday.
The corporate calendar has annual results from brewer and distiller Diageo. Oil major BP and baker Greggs report half-year numbers.
By Sophie Rose, Alliance News reporter
Comments and questions to newsroom@alliancenews.com
Copyright 2023 Alliance News Ltd. All Rights Reserved.
