FTSE set for positive start after Yellen comments

12th Feb 2014 07:16

The FTSE is set for a modest rise at the opening bell this morning, boosted by a strong performance in the US and Asia overnight following comments from Federal Reserve Chair Janet Yellen. City sources predict the FTSE 100 will open nine points higher than yesterday's close of 6,672.66.In her first address as Chairwoman, Yellen assured investors that the tapering of quantitative easing is likely to continue at a similar pace to previous reductions. Speaking at her semi-annual monetary policy report to Congress, Yellen said the central bank would continue to taper in "measured steps" after a "broad improvement" in the labour market.However, she added that while the unemployment rate has fallen by nearly a percentage point since the middle of last year, "the recovery in the labour market is far from complete".Meanwhile, over night Australia reported weaker consumer confidence, which had been expected from some economists, while China posted better-than-expected trade balance figures, with exports registering a 10.6% year-on-year rise in January. BoE quarterly Inflation Report in focusBank of England (BoE) Governor Mark Carney is expected to reiterate his commitment to low interest rates when he presents an update on his forward guidance policy later today.The BoE has come under mounting pressure to revamp its guidance as the unemployment rate has fallen faster-than-expected to the 7% threshold at which it said it will consider raising interest rates. According to Alpari Market Analyst Craig Erlam, people will be hoping that Carney addresses the BoE's forward guidance, a policy which was introduced during his first quarterly inflation report last year, to change its benchmark rate, currently at a record low of 0.5%."Unemployment has fallen much faster than expected and is currently only 0.1% above the threshold that the central bank gave for when it will start to consider an interest rate hike. Given that they only expected this to happen next year, it has completely negated what the guidance was meant to achieve," Erlam explained. He said today's conference may be used as an opportunity for Carney to either bin the policy or alter it. Reckitt celebrates strong year, but warns of market challengesConsumer products giant Reckitt Benckiser said it exceeded its targets after 'another strong year', but warned that markets conditions have become more challenging. The company, which owns brands such as Cillit Bang, Nurofen and Durex, said that constant currency revenue growth would slow to 4-5% in 2014, while margins would also be flat to slightly higher.Admiral Group has extended its existing UK car reinsurance partnerships with Hannover Re, Mapfre Re, New Re and Swiss Re to at least the end of 2016. The motor insurance company said there has been no material change to the cost or contractual terms of these arrangements.African explorer Tullow Oil unveiled higher revenue but profits fell in the face of a $200m increase in exploration write-offs. Engineering and project management consultancy Atkins said it continues to trade in line with company expectations and its overall outlook for the full-year remains unchanged. Across its geographical divisions, its UK business continues to trade well with good momentum in its rail and highway consultancy divisions. Atkins, which derives about half its revenues from the UK, said it expects progress in the business's operating margin in the second half.NR