The FTSE 100 is poised to open about 10 points lower at 9,693, setting London up for a muted start even as much of Asia trades with a firmer tone.
Regional markets regained momentum on Tuesday after a sluggish opening to the week, helped along by another run of soft U.S. economic data that has strengthened expectations for Federal Reserve rate cuts. The narrative driving sentiment remains the same: cooling labour conditions combined with steadying inflation point to a more accommodative Fed — and, for now, investors are leaning into it.
A ninth consecutive monthly contraction in the ISM manufacturing survey only added to the view that the U.S. economy is decelerating just enough to keep policymakers on a dovish path.
Asian equities responded accordingly. Hong Kong, Sydney, Seoul, Singapore, Taipei, Wellington, Manila and Jakarta all advanced, while Shanghai edged lower.
Tokyo also recovered part of Monday’s pullback as traders weighed Bank of Japan Governor Kazuo Ueda’s weekend suggestion that a rate hike may be back on the table. His comments rattled global risk appetite, pushed Japan’s two-year bond yields above 1% for the first time since the financial crisis, and put pressure on crypto markets.
In the U.S., major stock indices finished Monday’s session in negative territory.
