London pre-open: Risk-off for stocks amid busy central bank week

London stocks were being called lower on Monday morning, continuing the sell-off from last week as a storm of uncertainty sees Brexit worries mingle with monetary policy meetings from UK, US and Japanese central banks this week.

With Asian markets sharply in the red ahead of the European open, the FTSE 100 index is predicted to fall 54 points from its lower finish at 6,115.76 last week.

With less than a fortnight until the UK's vote on continued EU membership, analyst Michael Hewson at CMC Markets said this "shift in sentiment away from the complacency just over two weeks ago when it was widely expected that the “remain” camp would probably carry the day, has spooked already anxious markets, already concerned about further slowdowns in global economic growth particularly in light of recent weak economic data out the US, China and Japan".

According to bookmaker Betfair the odds on the UK voting 'remain' have fallen to 68.5% on Monday from the 75% seen at the end of last week and a peak of 78% the day before. Several polls show a lead for the ‘Leave’ campaign.

This week the important risk events to be navigated are the monetary policy meetings from the Banks of England, Japan and Switzerland as well as the US Federal Reserve.

"Investors should keep in mind that the upcoming Fed meeting is quite important as it is not only going to be about the upcoming interest rate hike but also about the future of interest rates by FOMC members," said Naeem Aslam at Think Forex.

"We believe that the Fed may take a softer approach for years 2017 and 2018 in their plan but that they won’t back down from their stance in having two rate hikes this year."

In company news, Inmarsat announced that it had formed a partnership with maritime broadband specialist SpeedCast International to roll out the satellite company's new Global Xpress (GX) service to around 2,000 vessels in five years. Under the new strategic alliance, the pair will work together in key maritime markets around the world to promote and roll out the maritime-focused Fleet Xpress services, powered by the new GX network of satellites, to existing and new customers as well as its FleetBroadband service as a primary back-up option.

UBM reached milestone in its sale of PR Newswire, with confirmation that the US Department of Justice has filed its proposed settlement under the Hart-Scott-Rodino Antitrust Improvements Act, which it expects to conclude "shortly".
The FTSE 250 specialist trade publisher and events company, which initially announced the sale of the newswire service to a division of Cision in December last year, said it expects to be given an early termination to the Hart-Scott-Rodino approval.

Reports said that Sports Direct had made a third and presumably last bid for several BHS stores. However, the Financial Times' sources dismissed Mike Ashley’s interventions "as a publicity stunt at a time when his Sports Direct retail group faces damaging revelations surrounding its treatment of contract workers".