- Sentiment hit by poor US and Chinese data
- FOMC minutes reveal plans for continued tapering
- IMF warns of financial problems arising in emerging markets
Stocks are set to open firmly in the red today after both Chinese and US data came in below expectations overnight.
City sources predict the FTSE 100 will open 44 points lower than yesterday's close of 6,796.71.
In China, factory states for February fell to a seven month low of 48.3, below expectations of 49.5, revealing a steep decline in new orders.
In the States, minutes from the most recent Federal Open Market Committee meeting showed that policymakers chose to shrug off recent weak weather-affected economic data to continue scaling back stimulus last month, knocking sentiment lower.
Meanwhile, the Commerce Department revealed that housing starts fell by 16% in January to a seasonally adjusted annual rate of 880,000 units, compared with a revised 1.05m-unit rate in December when they fell 4.8%. This was the worst percentage drop since February 2011 and well below the 4.9% fall expected by analysts.
Separately, building permits registered a higher-than-expected fall of 5.4% in January to a 937,000-unit pace, while mortgage applications retreated 4.1% in the week ended February 14th against a 2% slump the previous week.
Sentiment was also dampened by the International Monetary Fund which warned of financial problems arising in emerging markets. The organisation said economies where inflation is still high, or where policy credibility has come into question, "need to continue tightening monetary policy in the context of strengthened policy frameworks".
Turning to today, US inflation data will be the prime focus ahead of the Federal Reserve's March meeting.
US consumer prices are expected to have risen by 1.6% year-on-year in January, up from 1.5% a month earlier. On the month, they are tipped to fall to 0.1% growth from 0.3%.
Other notable releases in the US will be confidence data, continuing claims, initial jobless claims and Markit's preliminary reading for manufacturing purchasing managers' index (PMI).
In the Eurozone, a report on consumer confidence will be unveiled along with PMI for service and manufacturing.
In this morning's UK company news, British Gas owner Centrica revealed its market conditions in 2014 are set to remain challenging amid political pressure to lower energy prices. In its 2013 annual results, the group warned that going into the new financial year there would be a squeeze on margins, unusual weather patterns on both sides of the Atlantic, rising unit costs in the North Sea and weak economics for gas storage and gas-fired power generation. For the year through December 2013, operating profit fell 2% to £2.69bn, as British Gas customers used less energy during an unseasonably warm weather towards the end of last year.
Ophir Energy has signed a letter of intent with Petrofac to provide services as operator of the proposed gas development on its gas resources in Equatorial Guinea. The group also announced it was evaluating a short-list of proposals for the preferred midstream solution for the development. Chief Nick Copper said Ophir was making "considerable progress" in commercialising the gas resource.
Packaging group Rexam said underlying profits rose 4% in 2013 as it gave an upbeat outlook, with the company now focused on the beverage can market following its recent restructuring. Underlying profit before tax totalled £372m in the 12 months to December 31st, up from £358m, on sales that rose 1% to £3.94bn from £3.89bn.