UK stocks are expected to open with moderate gains on Thursday morning following a decent finish on Wall Street last night, as investors await two important policy decisions from the Bank of England (BoE) and the European Central Bank (ECB) later on.
The Bank of Japan meeting overnight was "a bit of a non-event", according to Market Analyst Craig Erlam, after policymakers voted unanimously for no change in policy, as expected.
This decision "comes as no surprise given the size of the bond buying program already in place and the fact that, so far, 'Abenomics' appears to be working, with small amounts of growth and inflation being seen", Erlam said.
No change is also expected from the BoE and ECB which will unveil their decisions at 12:00 and 12:45, respectively, though a close eye will be kept on any accompanying statements from both central banks which could spark some volatility in the markets.
City sources predict the FTSE 100 will open up around 18 points from yesterday's close of 6,474.74.
The Federal Reserve's September Beige Book gave stocks on Wall Street a boost last night after it found that the economic activity grew at a "modest to moderate" pace between July and August, similar to the previous survey. Analyst Cooper Howes from Barclays said that the Beige Book "is consistent with our expectations of a tapering of asset purchases at the September Federal Open Market Committee meeting".
Investors are now looking ahead to the all-important US jobs report on Friday which will be a large factor in the Fed's decision on whether or not to adjust current stimulus measures later this month.
Syria will likely still be on the back of everyone's minds on Wednesday as President Barack Obama continues to gather support for a US intervention following last month's alleged chemical weapons attack by Bashar al-Assad's regime. Ahead of the crucial vote in Congress next week, Obama said the credibility of the US is on the line over its response. "We believe very strongly with high confidence that chemical weapons were used; we want to join with the international community for an effective response," he said.
Stocks to watch
Water group Severn Trent has confirmed it has no plans to apply to regulator Ofwat for a special interim review of its 2010-2015 price limits relating to investments and costs associated with the adoption of Private Drains and Sewers. It said the costs associated with the 2011 transaction will be absorbed by Severn Trent Water and will not be passed on to customers.
easyJet reported rising passenger numbers and an increased load factor for August. Passenger numbers increased 3.9% to 6,101,344 from a year ago. Load factor, or passengers per available seats, rose 1.1 percentage point to 92.8%, the budget airline said in a statement.
Online gaming group Betfair said that the 13% decline in revenues in the first quarter was in line with its plan and assured investors that it was still on track to hit full-year expectations. Revenues totalled £90.4m in the three months to July 31st, down from £103.8m the year before. The company said that this reflected its continued focus on sustainable markets - which account for three quarters of group sales - as well as the impact of regulation and the absence of a major football tournament during the period (Euro 2012 took place in Betfair first quarter last year).