FTSE 100 Muted as Traders Eye Inflation Data and Bank of England’s Rate Decision

The week begun with a muted FTSE 100 index as traders focus on a string of heavyweight economic announcements.

The Bank of England’s next interest rate decision, which is scheduled on November 7, will be influenced by data on inflation, unemployment, and pay numbers that are released on Tuesday.

The blue-chip stock is currently down 0.029% at 8251.29 on Monday, the day the government is expected to host hundreds of global corporations for a business conference. Kier Starmer is expected to make a commitment to “rip out bureaucracy” in order to boost investment.

At the beginning of the third quarter earnings season, JPMorgan released results that were expected to raise all of the major Wall Street benchmarks.

$JPM reports 3Q24 net income of $12.9B and EPS of $4.37 with an ROTCE of 19%.

— J.P. Morgan (@jpmorgan) October 11, 2024

Monday morning, reports previewing the Prime Minister’s speech have taken over the business pages.

According to sections that have been leaked, he will reveal private sector commitments to invest over £50 billion in the economy, as well as his government’s promise to “end chop and change” over policy to allow businesses to back new projects in the UK.

DAX 30 Starts the Week Strong Amid Speculation of ECB Rate Cuts

The Dax 30 is trading at 19,440.26 at the start of the week, up 0.34%. The DAX closed at 19,374 on Friday, October 11, up 0.85% from the previous session’s loss of 0.23%.

Demand for DAX-listed stocks was driven by investor prospects for additional fiscal stimulus measures from China as well as interest rate cuts from the Fed and ECB. Germany’s annual inflation rate decreased from 1.9% in August to 1.6% in September, raising hopes for an ECB rate cut in October of 25 basis points. Lower borrowing costs as a result of ECB rate cuts could boost corporate profitability and encourage higher share prices.

Annual inflation in Europe’s largest economy, Germany, slipped to 1.6% in September, below forecasts of 1.7%, and a drop from 1.9% in August.

Have central banks achieved a soft landing, or is it too early to tell?

For important risk disclosures, learn more at… pic.twitter.com/ZWuwk3T9nJ

— GraniteShares ETFs (@graniteshares) October 13, 2024

ECB Meeting on Thursday: Markets Anticipate Possible Rate Cut Decisions

At its meeting on Thursday, the European Central Bank is anticipated to further loosen monetary policy by 25 basis points.

September’s surprisingly low business activity in the eurozone and inflation that fell short of the ECB’s 2% target point to a poorer state of the eurozone economy than when the policymakers last met.

Week ahead in the markets: ECB interest rate decision takes centre stage https://t.co/WAK4ANphnZ pic.twitter.com/QxzuO8BHHi

— euronews (@euronews) October 14, 2024

President Lagarde is expected to reiterate her recent speech’s language that “latest developments reinforce our confidence that inflation will come back to its target in a timely manner” and acknowledge the rising downside risks to the growth perspective during the press conference.

In the short run, DAX developments are likely to be influenced by Eurozone inflation data and the ECB’s interest rate decision.

Softer-than-expected inflation data and a dovish ECB may bolster demand for the DAX. In contrast, calls to keep interest rates unchanged in December may push the DAX down.