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London pre-open: Stocks to edge down ahead of US PCE inflation

London stocks were set to edge down at the open on Friday as investors eye key US data.
The FTSE 100 was called to open 10 points lower at 7,554.

CMC Markets analyst Michael Hewson said: “As we look ahead to a mixed European open it’s been another choppy week, albeit with a positive bias, with the FTSE 100 on track for its strongest week of gains since March, driven by a rebound in the retail sector, with the likes of Ocado, Kingfisher, Marks & Spencer performing strongly.

“The battle to contain the inflation genie appears to have started in earnest, with the Federal Reserve fresh from raising rates by 25bps in March, following that up with a 50bps rate rise earlier this month, with the promise of another two 50bps moves in June and July.”

“Today’s US PCE Core Deflator could offer some clues about that, with the hope that we could see a decline to 4.9% from 5.2% in March. PCE Core Deflator is the Fed’s preferred inflation targeting measure and a softer number here, could give further encouragement to the view that we might see rate pause in September, after Atlanta Fed President Bostic floated the idea earlier this week. The PCE Deflator is expected to fall to 6.2% from 6.6%.

“Personal Spending for April is expected to rise by 0.7%, down modestly from 1.1% in March, with personal income set to increase 0.5%.”

In corporate news, housebuilder Vistry has launched a £35.0m share buyback programme as part of an effort to return surplus capital to investors and reduce the group’s overall share capital.

Vistry said the share buyback comes after a “strong start to the year”, with the FTSE 250-listed firm expecting full-year margins in both housebuilding and partnerships to be ahead of previous 2022 targets. Adjusted pre-tax profits were now expected to be at the top end of market forecasts.

UK pharma giant GSK said China’s National Medical Products Administration has approved a two-dose vaccine schedule for its Cervarix treatment in girls aged between 9 to 14 years for the prevention of cervical cancer.

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