(Alliance News) - London's FTSE 100 is set to open higher on Tuesday, ahead of a central banking bonanza which kicks off with decisions from the Bank of Japan and Federal Reserve on Wednesday.
"The Federal Reserve begins its two-day policy meeting today with soft but not collapsing employment and sales data, softer-than-expected but still near 3% inflation, and a high level of uncertainty and tariff-led volatility in its hands. The Fed is expected to maintain its rates unchanged. The dot plot and Powell's press conference will be closely watched by investors. Economists predict two rate cuts for the remainder of the year, traders see three," Swissquote analyst Ipek Ozkardeskaya commented.
"A dovish Fed outlook supports further dollar depreciation, while a more conservative stance could hurt growth prospects, also weighing on the greenback. The only thing that could revive USD appetite is an explicit signal from the Fed that it's ready to step in if economic growth faces a serious threat. Voilà. This sets up EUR/USD for a solid shot at clearing the 1.10 resistance, though overbought conditions could hinder a sustained breakout in the short run."
Gold shone again, meanwhile, spiking to a record high above the USD3,018 an ounce mark.
Eyes also remain on events in Russia and Ukraine. US President Donald Trump and Russian leader Vladimir Putin will talk on the telephone later on Tuesday about a possible end to the war.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called up 0.3% at 8,710.09
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Hang Seng: up 2.4% at 24,711.90
Nikkei 225: up 1.2% at 37,845.42
S&P/ASX 200: up 0.1% at 7,860.40
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DJIA: closed up 353.44 points, 0.9%, at 41,841.63
S&P 500: closed up 0.6% at 5,675.12
Nasdaq Composite: closed up 0.3% at 17,808.66
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EUR: higher at USD1.0927 (USD1.0922)
GBP: flat at USD1.2988 (USD1.2987)
USD: higher at JPY149.74 (JPY148.57)
GOLD: higher at USD3,017.41 per ounce (USD2,995.90)
(Brent): higher at USD71.61 a barrel (USD71.04)
(changes since previous London equities close)
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ECONOMICS
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Tuesday's key economic events still to come:
10:00 GMT eurozone trade balance
10:00 GMT eurozone ZEW economic sentiment survey
10:00 GMT Germany ZEW economic sentiment survey
13:15 GMT US industrial production
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The EU's foreign affairs chief is to meet David Lammy and John Healey to talk about scaling up economic pressure on Russia and supporting Ukraine. It comes as the UK and France continue their efforts to bring together a coalition of nations who would be willing to enforce a peace deal. The foreign secretary and defence secretary are due to meet Kaja Kallas on Tuesday, with conversations expected to touch on EU-UK co-operation on Ukraine, as well as how they can put financial pressure on Moscow and ensure damage in Ukraine is paid for. They are also expected to discuss action against cyberattacks and disinformation. Kallas is also expected to receive a briefing from the Chief of the Defence Staff. Before Tuesday's meeting, Lammy said: "A strong and secure Britain is a foundation of our Plan for Change. This cannot be achieved without strengthening our shared European security and coming together with our partners to ensure a just and lasting peace in Ukraine. "More than three years on since [Russian President Vladimir] Putin's illegal full-scale invasion, we are facing a once-in-a-generation moment for our continent. It's vital we upgrade our partnership with the EU and work together to bring an end to this war and deliver security of all of our citizens." Healey said: "This government is stepping up on European security; deepening our defence relationship with our EU and Nato allies is vital during this critical period. "European security starts in Ukraine. The UK and EU are united in our resolve to back Ukraine with the military firepower they need to stand up to Russia's illegal invasion and secure a lasting peace." Lammy met US vice president JD Vance in Washington over the weekend and discussed the US's now-ended pause on military intelligence sharing and the prospect of a ceasefire.
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Lawmakers in Germany's lower house of parliament, the Bundestag, are set to vote on Tuesday on a highly debated EUR500 billion spending package, aimed at revitalising infrastructure, advancing climate initiatives and boosting defence. The proposal, backed by the conservative CDU/CSU bloc, the Social Democrats and the Greens, includes lifting borrowing limits for a special infrastructure and climate fund, while also removing debt restrictions for defence, civil protection, intelligence services and cybersecurity. To pass, the package requires a two-thirds majority in the Bundestag - a constitutional threshold necessary to ease Germany's strict debt laws. Efforts to block the vote failed on Monday evening when Germany's Constitutional Court rejected multiple urgent appeals. The applications were filed by members of the far-right Alternative for Germany, AfD, the Left Party, the liberal Free Democrats and the populist Sahra Wagenknecht Alliance, BSW, party. If approved, the Bundesrat, the upper chamber comprised of the leaders of Germany's 16 states, must still give its green light for the package to take effect on Friday. The outgoing Bundestag was recalled for this crucial vote, while the newly elected parliament is set to convene next week.
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BROKER RATING CHANGES
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JPMorgan reinitiates Rio Tinto with 'overweight' - price target 5,920 pence
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COMPANIES - FTSE 100
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Pearson will kick off the first portion of a previously announced GBP350 million share buyback programme on Tuesday. The first tranche of the programme is worth GBP175 million and is expected to be completed on or before August 18. Morgan Stanley & Co International will manage the first tranche. London-based educational publisher Pearson announced the buyback in annual results at the end of last month. Numbers showed a rise in 2024 profit, despite a slight drop in sales.
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COMPANIES - FTSE 250
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Trustpilot Group said it expects a 2025 outturn ahead of market expectations, after the consumer feedback platform posted a swing to profit for 2024. Pretax profit in 2024 amounted to USD5.2 million, swinging from a loss of USD1.9 million. Revenue improved 19% to USD210.7 million from USD176.4 million. It rose 18% at constant currency. "Our strategy is clear: we operate an open, trusted platform for consumers to help each other make the right choices, and for businesses to build trust, grow, and improve. We maximise the platform's inherent network effects by concentrating on depth in focus markets and verticals; and we drive a software as a service model with positive net dollar retention, underpinned by product innovation," Chief Executive Officer Adrian Blair commented. "We executed well against this in 2024, delivering record bookings, profitability and cash generation, returning USD42.9 million of capital to shareholders through two share buybacks. We refreshed our go-to-market approach by simplifying our packages and updating our pricing." Trustpilot announced Tuesday a further buyback of up to GBP20 million. Trustpilot reported 2024 adjusted earnings before interest, tax, depreciation, and amortisation of USD24.1 million, a 55% surge from USD15.5 million. For 2025, it expects an adjusted Ebitda "slightly ahead of market expectations". It puts consensus at USD30 million, which would represent on-year growth of 24%. It expects high teens 2025 revenue growth on a constant currency basis, "on the back of strong 2024 bookings". Blair added: "Looking forward, we will continue to deliver product innovation to embed trust across commerce, as trust becomes even more important in the age of AI."
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SThree reported another decline in net fees, as the science, technology, engineering and mathematics-focused recruiter grapples with "ongoing challenging market conditions". Net fees in the first-quarter ended February 28 fell 15% on-year to GBP78.4 million, consistent with its fourth-quarter outturn, SThree said. The steepest drop in net fees was in the UK, where they dived 30% on-year in the first quarter to GBP6.9 million from GBP10.0 million. "The group has delivered a stable Q1 performance consistent with Q4 FY24 despite the anticipated challenging market conditions driven by the ongoing global political and economic conditions. New business continues to be soft, however extensions remain robust across our core STEM Contract service offering, providing sector-leading visibility," CEO Timo Lehne said. "As we look ahead, business leaders are continuing to navigate an evolving macro-economic backdrop which is weighing on investment decisions. Despite this, we are highly confident, supported by independent industry analysis, that the future economy is based on hard-to-find STEM skills, and we are ensuring SThree is in the best place to deliver on this demand." SThree said in its two largest markets, Germany and the US, net fees declined at a slower pace in the first-quarter than they did in the fourth. It expects a full-year performance in line with previously announced GBP25 million pretax profit guidance.
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Technology services provider Computacenter said it enjoyed the "most profitable" second half in its history, though a tough comparative in the first six months of 2024 weighed on its bottom line. Pretax profit last year fell 10% to GBP244.6 million from GBP272.1 million in 2023. Revenue, however, edged up 0.6% to GBP6.96 billion from GBP6.92 billion. Administrative expenses were 2.0% higher at GBP798.9 million, and in 2024, Computacenter reported no repeat of the GBP5.3 million gain it made in 2023 from "other income" related to an acquisition of a subsidiary. "Computacenter delivered a solid performance in 2024 as a whole in the context of a tough first half comparative and a more challenging IT market. Encouragingly, the second half was the most profitable in our history and was derived from our highest number of major customers. We executed well in North America, achieving another record year while Germany performed robustly. Technology Sourcing momentum improved through the year and we were particularly pleased with Professional Service's double-digit growth," CEO Mike Norris said. "Cash generation was strong, providing us with the capacity to continue to invest in leading systems and to deliver enhanced shareholder returns through the completion of a GBP200 million buyback. Since 2013 we have distributed nearly GBP1 billion pounds to shareholders while making targeted acquisitions that have enhanced our global footprint, performance and business resilience as well as our long-term growth potential." Computacenter maintained its final dividend at 47.4 pence per share, with its total dividend foe 2024 raised 1.0% to 70.7p from 70.0p. Looking ahead, it said: "We exited 2024 in a robust position with a committed product order backlog which is significantly ahead of our position in December 2023, as well as at the end of June 2024, with all regions ahead. The size of the projects we are currently delivering gives us good momentum at the start of 2025. Looking to 2025 as a whole, we remain mindful of the uncertain macroeconomic and political environment. In North America, following a strong performance in 2024, we continue to be excited by the growth opportunities we see ahead. We have started the year positively and overall, we expect to make progress in FY 2025, with earnings per share benefiting further from the impact of the share buyback."
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OTHER COMPANIES
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Mobile payment service provider Boku reported an increase in 2024 revenue and hailed its "healthy and increasing pipeline of opportunities". Boku expects its top line to grow again this year, "significantly exceeding current consensus". Revenue in 2024 rose 20% to USD99.3 million from USD82.7 million in 2023, though pretax profit fell 46% to USD6.2 million from USD11.4 million. A USD3.4 million hit from the fair value loss on warrants, compared to a USD53,000 gain in 2023, kept a lid on profit. Administrative expenses rose 20% to USD96.9 million. Adjusted Ebitda, however, increased 22% to USD31.4 million. "Boku's strong financial health and positive momentum reaffirms our position as a leader in local payment methods. With robust organic revenue and adjusted Ebitda growth, we continue to invest in capabilities that will drive future business expansion. Our deepening partnerships with global tech giants highlight the growing need for them to offer broader payment options to consumers beyond traditional payment cards," CEO Stuart Neal said. For 2025, it expects revenue growth of 20%, with its top line beating consensus of USD109.6 million. It said the adjusted Ebitda consensus is USD36.0 million.
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Old Mutual reported a "solid" financial performance last year, driven by swelling assets under management and higher insurance premiums. The financial services firm delivered pretax profit of ZAR15.49 billion, some GBP661.1 million, in 2024, up 11% from ZAR13.96 billion in 2023. Insurance revenue was up 6.4% to ZAR72.66 billion from ZAR68.26 billion. Old Mutual boosted its final dividend to 52 rand cents, up 6.1% from 49 cents, lifting the total payout to 86 cents, up 6.2% from 81 cents. Old Mutual Chief Executive Officer Iain Williamson described the group's 2024 performance as "solid". Old Mutual announced last months that Williamson would take early retirement on August 31.
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By Eric Cunha, Alliance News news editor
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