London pre-open: Gains expected after Yellen comments, rate decisions in focus

8th May 2014 07:40

The FTSE is set to move back above the 6,800 mark this morning, lifted by comments made in the US last night by Federal Reserve Chair Janet Yellen, as well as an easing of tensions in Eastern Europe. That comes ahead of rate decisions in both the UK and Europe, as well as a press conference with the European Central Bank and further comments expected from Yellen. The top tier index is predicted to open seven points above yesterday's close of 6,796.44.Meanwhile, data out from China showed a wider-than-estimated trade surplus in April. Exports grew at an annual rate of 0.9% last month, up from a 6.6% slump in March and surprising analysts who had pencilled in a fall of around 3%. Imports increased by 0.8% year-on-year in April, compared with a 11.3% fall the month before and better than the -2.1% forecast.Last night Yellen said that the central bank will continue to stimulate the US economy amid signs that a slowdown in the housing market is posing a fresh risk to the recovery.Testifying to the Joint Economic Committee in Washington, Yellen also said that inflation and the labour market still far away from the Fed's targets. "A high degree of monetary accommodation remains warranted," she said.Despite upbeat economic figures as of late - such as the 280,000 increase in non-farm payrolls in April and a drop in the unemployment rate to 6.3% - Yellen sees risks from the recent "flattening out" of housing activity."Readings on housing activity - a sector that has been recovering since 2011 - have remained disappointing so far this year and will bear watching," she said. Meanwhile, over in Eastern Europe, tensions eased somewhat yesterday after Russian President Vladimir Putin signalled that he is open to discussing measures to resolve the crisis. He also said he had pulled Russian troops from the borders as he called on pro-Russian activists in eastern Ukraine to postpone a planned referendum this weekend.In this morning's company news, UK supermarket chain WM Morrison has held on to its full-year targets but blamed heightened competition in the industry for a slump in sales in its first quarter. "As anticipated the market has continued to be competitive throughout the period," the company said in a statement this morning. Morrison, which as part of the Big Four grocers, is losing market share to the so-called 'discounter' shops like Aldi and Lidl, reported a 4.2% drop in total sales excluding fuel in the 13 weeks to May 4th (down 5.6% including fuel).Barclays said it would cut 7,000 jobs in its Investment Banking division by 2016 as part of its Group Strategy Update.BT's new TV sport channels underpinned record fourth-quarter consumer revenues, helping the UK telecoms group to ring up forecast-busting annual revenue and profits.FTSE-100 software firm Sage booked a 5% increase in half-year revenue, driven by strong growth in software subscription, and said it remains confident of achieving targets for the full-year. Organic revenue rose to £657m for the six months ended March 31st 2014 from £626m the same time a year earlier. Underlying basic earnings per share rose 8.3% to 11.12p.NR