London pre-open: MPC, central banks in focus

Investors were anxious ahead of Thursday´s meeting of the Monetary Policy Committee given the more 'hawkish' tone adopted by US Federal Reserve chairwoman Janet Yellen on the previous day.

The Footsie was being called to start the day 11 points above Wednesday´s close of 6,412.88 despite the slight selling seen on Wall Street overnight.

As of 07:27 the Shanghai Stock Exchange´s Composite Index was 1.83% higher to 3,522.82.

In testimony before the House Financial Services Committee on Wednesday evening Yellen said the December FOMC meeting would be a 'live' one, going on to argue that a prompt hike in rates would be 'prudent' if incoming data between now and then supported such action.

Such remarks have led traders in the US to bump up the probability they assign to a December rate rise.

In the UK, some market watchers also believe the MPC might need to move more quickly than financial futures are now suggesting.

"There may currently be some confusion in the markets around the timing of the first rate hike from the BoE, but after today’s events things should hopefully be much clearer.

"The problem is that while these things are intended to provide more clarity and transparency, what tends to happen is the indecision within the central bank sends mixed messages and can leave the markets more confused than before," said Craig Erlam, Senior Market Analyst at Oanda.

In a similar vein, Michael Hewson, Chief Market Analyst at CMC Markets UK told clients that: "While inflation remains very low, wage growth here in the UK is well above US levels, and has prompted speculation that we could see another MPC policymaker break ranks with Ian McCafferty to argue for a rise in rates. If someone does do that, the smart money could well be on Martin Weale given that he was also a dissenter 12 months ago."

Going in the other direction, and perhaps explaining some of the wariness on the part of the MPC and the Fed, on Wednesday European Central Bank governing council member Frank Smets told Handelsblatt that "even if this low inflation is related mainly to falling oil prices, there is a danger that it will have a negative impact on inflation expectations and they could lose their anchoring".

Linked to all of the above, a raft of Fed speakers were scheduled to take to the podium on Thursday, including the presidents of the Dallas and New York reserve banks at 12:30BST.

Drugmaker Astra hits FX headwinds

AstraZeneca’s third quarter revenues have been hit by foreign exchange woes, but the company has upgraded its revenue outlook for the year. The FTSE 100 pharmaceutical company posted its third quarter results to 30 September on Thursday. While year to date revenues are flat at constant exchange rates on the previous year at $18.3bn (£11.9bn), the quarter only brought in $5.9bn in total revenue – a 2% drop.

Third-quarter like-for-like sales at Morrison Supermarkets fell at a faster rate than in the previous quarter and worse than expectations. However, management confirmed they expect underlying pre-tax profit to be higher in the second half than in the first.

RSA Insurance booked a net loss of £16m in the third quarter as a result of the earthquake in Chile, but insisted its turnaround plan is on track as it posted a 1% rise in underlying premium income for the first nine months of the year. After suitor Zurich Insurance announced an end to its interest in acquiring the company in September, chief executive Stephen Hester said the unsolicited approach was a distraction in the third quarter but the business continued to perform well despite that.