(Alliance News) - Stocks in London are set to open slightly lower on Monday, following a muted close on Wall Street on Friday, in what will be a quieter week for equities ahead of Christmas.
IG says futures indicate the FTSE 100 to open down 5.1 points at 7,571.26 on Monday. The index of London large-caps closed down 72.62 points, 1.0%, at 7,576.36 on Friday, after a US Federal Reserve-fuelled rally petered out.
Sterling was quoted at USD1.2688 early Monday, a touch lower than USD1.2693 at the London equities close on Friday. The euro traded at USD1.0915, slightly higher than USD1.0912.
Against the yen, the dollar was quoted at JPY142.28, up versus JPY141.75.
The Bank of Japan began its two-day monetary policy meeting and will announce its decision on Tuesday.
"The US dollar was one of the big losers last week driven lower by expectations that US rates have peaked and are on their way back down, with the Japanese yen one of the biggest gainers," said CMC Markets' Michael Hewson.
"This shift in sentiment will no doubt be welcomed by the Bank of Japan and to some extent helps them out with respect to the weakness of the yen...There is now less incentive for them to think about altering their current policy settings, although they might hint at starting to execute some form of shift early next year."
According to a Bloomberg report last Monday citing "people familiar with the matter", the BoJ is likely to keep its ultra-loose monetary policy in place, despite recent market speculation that the negative rate may be scrapped. This is because the central bankers have yet to see enough evidence of wage growth to support sustainable inflation, Bloomberg reported.
In Asia on Monday, the Nikkei 225 index in Tokyo closed down 0.6%. In China, the Shanghai Composite was down 0.5%, while the Hang Seng index in Hong Kong was down 1.1%. The S&P/ASX 200 in Sydney closed down 0.2%.
In the US on Friday, Wall Street ended mostly higher, with the Dow Jones Industrial Average up 0.2%, the S&P 500 flat, and the Nasdaq Composite up 0.4%.
Gold was quoted at USD2,022.01 an ounce early Monday, lower than USD2,034.62 on Friday.
Brent oil was trading at USD77.04 a barrel, rising from USD76.34.
Monday's economic calendar has the latest Ifo business climate index reading from Germany at 0900 GMT. The week picks up speed with a rate decision from the BoJ on Tuesday, UK inflation data on Wednesday, and a US gross domestic product reading on Thursday.
Monday's local corporate calendar has full-year results from ten-pin bowling firm Hollywood Bowl
By Elizabeth Winter, Alliance News deputy news editor
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