Tuesday preview: Fed's Powell, BP in the spotlight

bp dl oil energy uk oil rig crude brentwti — Clair Ridge 1Company photo, copyright BP

BP

380.70p

17:15 23/12/24

0.44%

1.65p

The market spotlight on Tuesday was expected to be firmly on an interview of Federal Reserve chairman, Jerome Powell, and what insights he might provide on the future path of monetary policy, especially following the surge in non-farm payrolls reported just four days before.

FTSE 100

8,102.72

17:14 23/12/24

n/a

FTSE 350

4,471.06

17:09 23/12/24

n/a

FTSE All-Share

4,428.73

16:44 23/12/24

n/a

Oil & Gas Producers

7,677.43

17:09 23/12/24

0.55%

42.07

As of Monday afternoon, Fed funds futures were discounting two more 25 basis point interest rate hikes by the Federal Open Market Committee at the 21-22 March and 2-3 May policy meetings.

That would take the target range for the Fed funds rate to 5.0-5.25%, a level consistent with most policymakers' recent remarks and speeches.

Furthermore, a first rate cut was now only anticipated by Fed funds futures in December.

On home shores, at 0700 GMT mortgage lander Halifax would publish its closely followed house price index for January.

In parallel, Germany's Federal Office of Statistics was to publish figures for industrial production covering the month of December.

Overnight, in Japan, data for nominal and real wage growth in December were due out, alongside a reading on household spending during that same month.

Down Under, rate-setters in Sydney were expected to announce a 25bp hike in the central bank's cash rate to 3.35%.

Chinese foreign reserves figures for January were also scheduled for release.

In the corporate space, all eyes would be on BP's full-year results with media coverage likely to focus on the amount of taxes paid and its recent decision to slow push towards clean energy.

Nonetheless, according to Michael Hewson, chief market analyst at CMC Markets UK,: "Whatever politicians say you can’t change the political reality that the energy backdrop has changed with the recent surge in energy prices.

"With energy security and high prices now front of mind for ordinary people, the only way to reduce prices is to add extra capacity, which means new LNG resources will be needed.

"Returns from renewables are well below those of gas, and also aren’t reliable enough."

Hewson did however judge the amount of capital spending across the year - of $447m - to be "quite frankly pitiful".

Tuesday 07 February

FINALS

Kosmos Energy (DI), React Group, BP

INTERIMS

Genus, Mattioli Woods, Feedback, Alumasc Group

TRADING ANNOUNCEMENTS

SSE, Syncona Limited NPV

AGMs

Ten Lifestyle Group, Blackrock Frontiers Investment Trust, Numis Corporation

UK ECONOMIC ANNOUNCEMENTS