London pre-open: FTSE to continue higher as geopolitical risk falls

19th Aug 2014 07:45

The FTSE is set to continue its journey higher this morning as geopolitical tensions ease and attention turns to central banks. City sources predict the FTSE 100 will open around 20 points higher than yesterday's close of 6,741.25, tracking gains seen amongst US stocks overnight, which drove the Nasdaq to a 14-year high. Following a meeting in Berlin, Ukrainian and Russian foreign ministers appear to have stepped closer to a potential end to the crisis, while the truce in Gaza and Israel was extended by 24 hours and the Mosul Dam was regained by the Iraqi and Kurdish forces. "With geopolitical risk appearing to subside, investors are free to focus on other matters, which this week is likely to be the next moves from the Federal Reserve, the Bank of England (BoE) and the European Central Bank (ECB)," Alpari analyst Craig Erlam said. "Key note speeches at the Jackson Hole symposium from Fed Chairwoman Janet Yellen on Thursday and ECB President Mario Draghi on Friday will be picked apart for any small hints on the direction of monetary policy in the coming months, while the minutes from recent BoE and Fed meetings released on Wednesday will also be heavily analysed for any hidden messages."On Tuesday's agenda is the release of UK inflation data, which is expected to show a drop in the consumer price index (CPI) to 1.8% and to 1.9% on the core reading. The BoE's target for CPI is 2%. Inflation figures are also due to be released in the States later on in Tuesday's session.In UK company news, favourable weather in Europe and an ongoing recovery in the States helped CRH to offset difficult conditions in the wider Americas region, with the building materials group swinging to a profit in the first half of 2014. The Dublin-headquartered company made a pre-tax profit of €61m in the six months to 30 June, compared with a loss of €71m the year before.Profits rose 57% in the first half of the year at housebuilder Persimmon, which said trading in the early weeks of the second half remained ahead of tough comparative numbers from the prior year. The FTSE 100 builder took advantage of the booming housing market and sold 28% more new homes at prices 4.3% higher than the same period last year, also strengthening its land bank with 82,250 plots of land owned and under control by the end of June, up from 70,716 the year before.Big Yellow Group has completed the refinancing of its bank facilities, increasing their average unexpired term to 7.8 years, with a lower average cost of debt. The new five-year £145m loan, which was signed with Lloyds and HSBC, is 50% term and 50% revolving. Big Yellow also signed a seven-year £70m facility with M&G Investments, with a further short-term bridging facility agreed with Lloyds, which will be repaid on the drawdown of the M&G facility. NR