City sources predict the FTSE 100 will open around 39 points higher than yesterday's close of 6,576.16, tracking Wall Street's S&P 500
higher after it last night hit a record high as investors evaluated what Wednesday's last-minute deal means for the economic outlook.
It was reported in the Financial Times that although the shutdown disrupted a key month of data and had a significant effect on the world's largest economy, the Federal Reserve could still begin tapering its asset purchases as early as December.
As such, speeches from several members of the Fed will likely be closely watched by market participants this afternoon; presidents of the Richmond and New York Fed banks are due to speak, along with Fed governors Daniel Tarullo and Jeremy Stein.
Alex Young, Senior Sales Trader at CMC Markets, said that the sell-off in the dollar
on Thursday hinted at the market's view on Fed tapering, "which must surely now be pushed back well into 2014 given that we are very much in the dark as to the real effect on US growth of the shutdown until the government data departments are back up and running".
Turning to today's economic data, the big news of the day will be out from China with gross domestic product (GDP) figures expected. The annual rate of Chinese GDP growth is estimated to have picked up from 7.5% to 7.8% in the third quarter.
Analysts at Capital Economics said that economic activity had "turned a corner in late Q2 and rebounded markedly in July and August". However, data since then has been mixed.
"While September's imports were upbeat, the latest PMIs and electricity consumption figures were disappointing, at least raising some questions about the durability of this investment-led rebound. [Today's data] will be closely watched to get a clearer picture," they said.
Industrial production data, also due out on today, is forecast to grow at a year-on-year rate of 10.2% in September, down from the 10.4% growth the month before. Meanwhile, retail sales growth should have accelerated from 13.4% to 13.5% last month.
In company news, diversified mining group Anglo American saw a sharp fall in iron-ore production in the third quarter, though output from its other smaller divisions was broadly higher year-on-year. The company said that production from its Kumba Iron Ore unit declined 24% to 9.5m tonnes in the three months to September 30th due mainly to weaker production at the Sishen mine in South Africa after ongoing pit constraints and regulatory safety stoppages. The company said it intends to address these problems and a longer-term operational strategy by the end of the year.
International consultancy RPS has agreed to acquire OEC Consulting, a Norway-focused company which operates within a variety of sector including oil & gas, infrastructure and health. OEC, which was acquired for a maximum consideration of £31.5m cash, employs about 100 staff and engages associates on a project specific basis.
Spectris said it expected underlying earnings for 2013 to be at the lower end of market forecasts amid mixed trading conditions. Analysts had previously pencilled in earnings before interest, taxes and amortisation of between £214m and £226.5m. The FTSE 250 company, which supplies precision instrumentation and controls, said customer activity had remained strong and reported sales had risen 5% in the three months to the end of September.