FTSE 100 led lower by banks and miners ahead of today’s BoE meeting

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The blue chip indicator is seen down about 3 points with just over an hour to open.

The FTSE 100 index started in the red, as expected, with miners and banks leading the decline before the decision later.

However, the London blue chip index was down just five points at just over 7118.

() is the lowest, down 2.8%, while () is down less than 1%.

“We do not expect policy surprises from the BoE today and expect a mostly impatient message; however, the main focus may be to publish a review of the Bank’s policy tightening, if it is released today,” (the) macro strategy team said.

DB economists predict that the bank’s focus will be on “resolving its bloated balance sheet more than on raising interest rates”.

But they said the main story from the past 24 hours was some strong signals from senior Fed officials about the tapping of the US central bank, sending Treasury yields lower and then higher.

Miners are prominent among the biggest declines in the FTSE index, closely followed by ( ) and ( ) and Antofagasta plc.

Risers () leads as it lifts its earnings and full-year guidance after a strong second quarter helped it swing back into the black market as the advertising industry returns to health.

Rolls-Royce Holdings PLC, which has made a famous rally among retail investors, is up more than 1% as it also returned to profit in the half year and confirmed it was close to selling its ITP Aero division.

6.45 am: London call lower

The FTSE 100 looks practically flat ahead of Thursday’s open as attention is focused on, with almost everyone wondering when the central bankers will move.

In London, CFDs firm IG Markets made the Citi benchmark just three points lower at 7,107 to 7110 with just over an hour remaining until the open.

Today’s meeting will be closely watched, albeit with small expectations, as economists, bankers and investors down the road look at possible timelines – to curb bond-buying stimulus and ultimately the path to higher interest rates.

First, though, there is the not-so-small issue of Covid-19.

“The UK economy remains in the grip of a so-called ‘pandemic epidemic’ which in itself is a dampening of economic activity, particularly on services, something that could worry the Bank of England, but with very high vaccination rates,” said Michael Hewson, an analyst at CMC. Markets, “And removing the isolation requirements on August 16, it’s something the central bank won’t have to worry about for much longer.”

“While there is little prospect of a policy change at this week’s meeting, it will still be worth noting if there is opposition over the pace of the bond-buying program, and whether the bank will consider slowing the pace.

“Anything more or less than a 7-1 or 6-2 split in the asset purchase program would be surprising, with 8-0 keeping prices unchanged.”

It’s a somewhat similar story over the pond. Last night, Fed Vice Chairman Richard Clarida put out a notice to the markets where he commented that stimulus measures could begin to taper off during the current year, although they are of course subject to prevailing economic conditions.

On Wall Street, the Dow Jones Industrial Average fell 323 points, or 0.9%, to 34,792 points.

The S&P 500 fell 0.46% to 4,402 while the Nasdaq ended the session in positive territory, up 0.13% at 14.780. Elsewhere, the Russell 2000 index centered on small businesses fell 1.23% to 2,196.

In Asia, Japan’s Nikkei rose 112 points or 0.4% to trade at 27,697 while Hong Kong’s Hang Seng fell 0.36% at 26,331. Meanwhile, the Shanghai Composite was down just 0.1% at 3,474.

About the markets

Pound: $1.3893, up 0.03%.

Gold: $1,809 an ounce, down 0.14%

Silver: $25.38 an ounce, up 0.04%

Brent crude: $70.56 a barrel, down 2.5%

West Texas Intermediate crude: $68.38 a barrel, down 3.09%

Bitcoin: $39,363, up 3.3%

6.50 a.m.: Early Markets – Asia/Australia

Stocks in the Asia-Pacific region struggled to gain on Thursday as Australia posted a trade surplus of A$10.5 billion in July, according to data from the country’s statistics office.

That was above expectations of a trade surplus of A$10.45 billion, according to a Reuters poll.

China’s Shanghai Composite Index is down 0.05% and Hong Kong’s Hang Seng Index is down 0.38%.

In Japan, the Nikkei 225 was up 0.43% while the Kospi in South Korea was down 0.05%.

Shares in Australia rose, with the S&P/ASX 200 index up 0.19%.

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