London pre-open: MPC and US earnings announcements in focus

The Footsie is expected to begin the session with losses of about 100 points after a bruising session on Wall Street last night, with some traders pointing out possible hints in yesterday's sector performance Stateside that weakness in energy is filtering through to other sectors of the stockmarket.

Headlines this morning are again rife with geopolitical news following the multiple bomb blasts registered in Indonesia's capital of Jakarta.

It is against that backdrop that traders and investors will be waiting on the Monetary Policy Committee's decision today, and Governor Mark Carney's press conference.

Markets will be watching for any changes to the tone of the Bank of England's chief following recent volatility in capital markets and the gyrations in oil and the pound.

To take note of, the People's Bank of China on Thursday left the yuan's fixing unchanged.

That saw the Shanghai Stock Exchange's Composite Index finish the session higher by 1.97% to 3,007.649.

Indonesia's central bank on the other hand unexpectedly cut rates on Thursday. At a regularly scheduled policy meeting the country's monetary authority lowered its main policy rate by 25 basis points to 7.25%.

Economists had expected the central bank to keep it unchanged.

The US Fed's Beige Book released overnight threw up some interesting insights, such as the recent weakness in automobile sales, some analysts said. Those were seen as one of the chief reasons behind recent oil price weakness, as per a research report from Barclays's Kevin Norrish dated 12 January.

"Of interest, auto sales "were somewhat mixed, as activity has begun to drop off from previously high levels in some districts"," Deutsche Bank's Jim Reid pointed out to clients on Thursday morning.

JP Morgan and Intel Corp. will release fourth quarter results today.

A speech from the president of the US Federal Reserve bank of St.Louis, James Bullard, will also be closely tracked for any dovish slant.

The possibility also exists that the European Central bank's Mario Draghi or Benoit Coeure might make some policy-relevant remarks later today.

Tesco beats market forecasts

An impressive like-for-like improvement over the Christmas period helped Tesco limit the third-quarter sales decline to 1.5%, beating market forecasts. Group LFL sales rose 2.1% and UK LFLs 1.3% in the six weeks to 9 January, helped by the abandoning of its three '£5 off £40' national coupon campaigns from the prior year.

Christmas sales at Argos for the 18 weeks to 2 January have dropped 2.2%, but a 5% increase in sales at Homebase has limited the damage to Home Retail Group. The company has been in the sights of supermarket Sainsbury’s in recent months and also announced last night it is in talks to sell off Homebase to an Australian conglomerate. Sales for the DIY and home furnishings business totalled £434m for the period, contributing to year-to-date sales over the last 44 weeks of £1.25bn. At Argos, total sales came in at £1.837bn for the quarter, with year-to-date sales at £3.58bn.

Luxury fashion retailer Burberry said underlying third quarter sales rose 1% to £603m, with comparable sales unchanged year-on-year against a fall of 4% in the second quarter – below the company's internal expectations. “In what remains a challenging external environment, and ahead of Lunar New Year, we currently expect adjusted profit before tax for FY 2016 to be broadly in line with market forecasts, supported by a further reduction in the performance-related pay charge, additional discretionary cost savings and an FX benefit,” the company said in a trading statement.

In a trading update for the 16 weeks to 2 January, Primark owner Associated British Foods said group revenue fell 2% from the same period last year, but was up 3% at constant currency. Total sales at Primark were 7% higher at constant currency but up 3% at actual exchange rates as due to the weakening euro against the pound. The group said it continues to expect currency pressures to lead to a modest decline in adjusted operating profit and adjusted earnings for the full year.