London pre-open: Stocks seen muted, with currencies in focus

London stocks were set for a muted open on Monday, with currencies in focus after German finance minister Wolfgang Schaeuble took aim at the European Central Bank over the weekend for its loose monetary policy, saying the currency is too low for Germany and responsible for the country’s trade surplus.

CMC Markets’ Michael Hewson said: “The timing of the comments is no coincidence given last week’s broadside by Peter Navarro, Donald Trump’s chief trade advisor, and are clearly an attempt to try and deflect some of that criticism.

“At the beginning of this year the US dollar index hit its highest levels in 14 years, and since then it has slowly started to slip back, despite the fact that US economic data has by and large been positive, while Fed policymakers have suggested that we could well see multiple rate rises this year.

“In addition to that there is increasing evidence that inflationary pressure is starting to exert itself in supply chains around the world, as input prices rise to multi year highs, yet the rise in the US dollar that we’ve seen over the course of the past twelve months has come to sharp halt, as it posted its worst monthly fall since March last year.”

The FTSE 100 was expected to open unchanged at 7,188.

There are no major UK data releases due.

In corporate news, National Grid on Monday said it was spending £35m to buy back up to 3.5m shares.

The company said the sole purpose of the exercise was to reduce its share capital as part of its management of the dilution resulting from the take-up of its scrip dividend offer for the interim dividend paid in January 2017.

The buy-back programme will be managed by Merrill Lynch International and will run until February 17. The purchased shares will be held as treasury shares, National Grid said.

Budget airline easyJet posted a rise in traffic and the load factor in January.

Passenger numbers were up 11% from the same month last year to 4.75m as the load factor – which gauges how full the flights are – edged up to 86.2% from 85%.

On a rolling 12-month basis, traffic grew 6.9% to 74.9m, while the load factor nudged down to 91.5% from 91.6%.

Emergency repairs business Homeserve has appointed David Bower as chief financial officer with immediate effect and will he also join the board and executive committee.

Bower, who joined Homeserve in 2005, was previously interim chief financial officer and held a number of senior divisional and group finance roles including six years as group finance director.