FTSE 100 today: London markets set for a calm start, tracking Asian peers

Moving markets today: Asian markets mixed, oil prices rise, gold holds steady; US PCE inflation in focus in a holiday-shortened week 

In Asian markets, there was a mixed performance, with some edging higher while others experienced slight declines. Concerns about potential intervention in the currency markets by Japan temporarily halted the yen’s decline. Meanwhile, oil prices rose due to worries about a decrease in global supply amid escalating tensions in the Middle East and between Russia and Ukraine. Investors will closely watch Friday’s release of the US personal consumption expenditures price index to assess the latest inflation trends. However, with many markets closed for Easter on Friday, the full impact of the PCE data won’t be felt until the following week. Trading on the UK markets will be suspended on March 29th for Good Friday and on April 1st for Easter Monday. Here are five key takeaways for your day. 

US President Biden approves $1.2 trillion spending plan 

Over the weekend, President Joe Biden signed a $1.2 trillion spending bill into law, ensuring that the U.S. government remains funded for the current fiscal year, which began half a year ago. Biden emphasized that this package, which received strong support from Congress in the early hours of Saturday, aims to invest in American citizens while also strengthening the economy and national security. The President, a member of the Democratic Party, urged Congress to move forward with other legislation that is currently stalled in the legislative process. 

BOJ board shows optimism in meeting inflation target: meeting minutes 

Minutes from the Bank of Japan‘s January meeting revealed a growing belief among board members that the goal of achieving a sustainable 2 per cent inflation rate was becoming more attainable. This outlook set the stage for the central bank to potentially phase out its stimulus policy at its subsequent meeting last week.  

On the other hand, Masato Kanda, Japan’s vice finance minister for international affairs, cautioned on Monday that the yen’s current weakness was not in line with underlying economic fundamentals. This warning underscores concerns about the yen’s significant depreciation against the dollar. 

Oil prices surge amid escalating geopolitical tensions 

At the start of the week’s trading in Asia, oil prices climbed due to concerns about a tighter global supply. This worry was fuelled by escalating tensions in the Middle East and the ongoing conflict between Russia and Ukraine. Adding to the upward pressure on prices was a decline in the number of active oil rigs in the United States. Brent crude futures rose by 0.56 per cent to $85.91 per barrel, while U.S. crude futures increased by 0.64 per cent to $81.15 per barrel. Both benchmarks saw minimal changes of less than 1 per cent last week compared to the previous week, Reuters reported.

Key highlights to monitor in a holiday-shortened week 

This week, there’s not much economic data coming through, partly because of celebrations like Purim and Holi at the start of the week, followed by Good Friday, which could mean shorter trading days in some markets. However, we can still expect updates on things like the fourth-quarter GDP for the US and UK, data on home sales, and a few reports on consumer sentiment, the FT reported. 

Investors will be particularly interested in Friday’s release of the US personal consumption expenditures price index, as it will give us a fresh look at inflation trends. As we near the end of the first quarter, there might be some ups and downs in the markets as fund managers make adjustments to their portfolios. 

Trading on the UK markets will be suspended on March 29th for Good Friday and on April 1st for Easter Monday. 

Asian markets mixed; China’s central bank stabilizes yuan 

Japan’s Nikkei 225 took a step back from its recent peak, slipping by 0.60 per cent, while the broader Topix index experienced a larger decline of 0.77 per cent. The Hang Seng index in Hong Kong kicked off with a 0.36 per cent increase, while mainland China’s CSI 300 index saw a 0.4 per cent drop right at the opening bell. South Korea’s Kospi initially climbed but later dipped by 0.17 per cent, edging closer to its two-year high. Conversely, the smaller-cap Kosdaq saw a rise of 1.10 per cent. Down under in Australia, the S&P/ASX 200 bounced back by 0.46 per cent from Friday’s losses, nearing its record levels. 

Meanwhile, the People’s Bank of China set the midpoint rate at 7.0996 per U.S. dollar. The dollar index dipped by 0.12 per cent to 104.30, following a nearly 1 per cent gain the previous week. Although the dollar’s strength had somewhat dampened interest in gold, the precious metal showed signs of recovery, climbing to $2,176 per ounce after hitting a record high of $2,217.79 last week.