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China steps up economic support, FTSE 100 seen higher
The FTSE 100 index is expected to break a three-day losing streak after Asian markets followed Wall Street’s lead and found positive territory.
Sentiment was boosted by China’s announcement of more 1 trillion yuan (120 billion pounds) of measures to help its economy recover from the Covid disruption.
US markets were modestly higher on Wednesday, with focus for the remainder of this week on the Jackson Hole economic symposium and Federal Reserve Chair Jerome Powell’s speech on Friday.
The US 10-year bond yield rose to 3.1% this week, the highest in almost two months, reflecting expectations that the Fed will continue to aggressively tighten monetary policy.
In the UK, the equivalent reading is 2.68%, the highest since 2014, as traders price in another half-point hike in interest rates next month.
Deutsche Bank analyst Henry Allen said: “Central bank price action was not as pronounced as in Europe yesterday given the more favorable energy situation in the US.
“But the peak interest rate priced in by Fed fund futures for March 2023 was still up 3.5 basis points on the day as investors continued to adjust their policy expectations in line with more hawkish rhetoric from Fed officials.”
Futures markets later point to a flat start for Wall Street, while CMC Markets has forecast the FTSE 100 index to open 18 points higher at 7489.
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