London pre-open: Stocks to fall after hawkish Fed comments

The FTSE 100 was called to open 15 points lower at 7,598.

CMC Markets analyst Michael Hewson said: "US markets also had a difficult session, sliding back on comments from Fed governor Lael Brainard and Mary Daly of the San Francisco Fed, who both suggested that the Fed could start the process of reducing the size of the balance sheet at the same time as raising rates next month.

"Yesterday’s comments put into sharp relief the concerns investors have, that in looking to rein back inflation, the Fed might overplay its hand and tighten too aggressively and tip the economy into recession. This concern looks set to manifest itself into a sharply lower open for markets in Europe this morning.

"Today’s Fed minutes should offer some additional insight into the thinking of all Fed policymakers into this part of the Feds normalisation process.

"As expected, the Federal Reserve raised rates at its March meeting by 25bps, although the decision wasn’t unanimous in that St. Louis Fed President James Bullard argued for a 50bps rate rise.

"Today’s minutes should give us an indication as to how much events in Ukraine tempered the Fed’s response last month in terms of the size of the increase in rates, and whether there was a temptation to go harder amongst other members and join Bullard in going for more than 25bps."

On the data front, the S&P Global construction PMI for March is due at 0930 BST.

In corporate news, tobacco company Imperial Brands said it had made "good progress" in delivering on its strategic objectives in the six months ended 31 March, with the group continuing to perform in line with its five-year strategy launched in 2021.

Imperial Brands stated it was on track to deliver full-year results in line with revised guidance issued on 15 March, with expected full-year net revenue growth of around 0-1% on a constant currency basis and adjusted operating profit growth of around 1% year-on-year.

Hilton Foods reported a rise in annual adjusted profit, driven by higher revenues across its global markets.

The company said adjusted pre-tax profits were up 13% to £67.2m. Revenue rose by a fifth to £3.3bn.