Source: Sharecast
"Yesterday allowed global risk investors to take a deeper breath. Dovish comments from Federal Reserve members, and de-escalation of trade tensions between the US and China allowed a further recovery in global equities," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
The FTSE 100 is being called to open around 0.1% higher than Thursday's close of 8,407.44. The index has now posted a gain in every trading session since 10 April, rising 9.5% overall. However, it still remains below levels on 3 April – the day after Trump first unveiled sweeping trade tariffs.
Helping recent gains were rumours that China is considering suspending its 125% retaliatory tariffs on select US imports, raising hopes that the two nations could come to a deal, while US-Japan trade talks were said to be promising.
However, reports from Xinhua News Agency early on Friday suggested that China was preparing contingency plans – such as monetary and policy tools to boost the economy amid a deepening trade war – as Beijing continues to dismiss US reports that the two sides were closing in on a trade deal.
Nevertheless, Fed rate-cut chatter has lifted sentiment in recent days after policymakers Christopher Waller and Beth Hammack both indicated that they would be happy to loosen monetary policy earlier than anticipated if economic data worsens – with market pricing for a June rate cut increasing.
"The rally isn’t just about the Fed blinking. Asia is waking up to a possible ceasefire in the trade war, and that’s adding fuel to the fire. For the first time in weeks, traders have something real to price into the tape," said Stephen Innes, managing partner at SPI Asset Management.
Back on home shores, economic data out on Friday showed that UK consumer confidence softened notably in April as concerns about the health of the economy mounted. The latest GfK Consumer Confidence Barometer was -23, down four points on both March and on April 2024, and the lowest level since November 2023. Within that, all-sub measures were lower, although the sharpest falls related to the economy. Expectations for the general economic situation over the next 12 months fell eight points to -37.
In company news, transport company Mobico on Friday said annual earnings would be at the lower end of guidance after announcing it had finally sold its its North America school bus business to global infrastructure investment manager I Squared Capital for up to $608m (£457m). Mobico expects upfront net proceeds of around $365m-385m. It added that the disposal will see cash flow reallocated to cutting debt and funding growth opportunities, particularly in the ALSA division.
