Shares in London were set to open higher on Friday after low unemployment in the United States threw cold water on expectations of an interest rate hike by the Federal Reserve this week. next.
Elsewhere on the central banking front, the People’s Bank of China was also in the spotlight, after low inflation in China increased pressure for economic stimulus.
Shares in New York ended higher on Thursday, supported by the weaker-than-expected reading of U.S. jobless claims, which reduced pressure on the Fed to raise interest rates on Wednesday next week.
Initial jobless claims for the week ending June 3 came to 261,000, an increase of 28,000 from the revised level of the previous week. The previous week’s level was revised up by 1,000 from 232,000 to 233,000.
The data bolstered expectations that the Federal Reserve will decide not to raise interest rates. The federal funds rate is currently between 5.00% and 5.25%.
“The faster-than-expected jump in initial jobless claims in the United States threw some cold water on high Federal Reserve prices yesterday,” commented Ipek Ozkardeskaya, analyst at Swissquote.
China’s annual inflation rate rose slightly last month, but did not stay well above zero. The consumer price index rose 0.2% year-on-year, picking up the pace a little 0.1% in April, the National Bureau of Statistics said. The figure is lower than the consensus quoted by FXStreet, which predicted a rise to 0.3% in annual inflation.
While policymakers elsewhere in the world stepped on the monetary policy brake to rein in runaway inflation, Beijing kept interest rates low relative to other major economies. But near-zero inflation in China highlights the challenges facing policymakers there as they try to stimulate the economy.
In the UK, Network International agreed to a buyout by a private equity fund, while CMC Markets backed a blockchain solutions company.
This article is originally published on zonebourse.com