Friday preview: US data on tap amid rising Fed rate cut hopes

(Sharecast News) - There are no major corporate releases scheduled for Friday in London so the market's focus will likely be on international economic announcements. A string of leading US economic indicators are due to be published during the session, including business inventories, capacity utilisation, a New York manufacturing survey and industrial production figures.

However, it will be the University of Michigan's consumer sentiment index for August that will be the highlight of the day, amid rising hopes that the Federal Reserve will cut interest rates at its next meeting.

The sentiment gauge is expected to rise to 62 from 61.7 in July, according to consensus forecasts, which would mark a six-month high for the closely followed indicator.

However, the meagre increase (if as expected) would mean that overall sentiment is still relatively subdued, compared with the 70-point-plus readings registered towards the end of last year.

The Fed continues to monitor economic data closely to predict whether the economy requires a cut in rates to encourage domestic consumption and ease the strain on households.

Recent weak labour-market figures and this week's lower-than-expected inflation reading have spurred hopes that the central bank may act to weaken monetary policy at its next meeting in September.

"Fed doves now see a huge opportunity for the central bank to focus on the slowing jobs market rather than tariff-led inflation risks that have yet to materialise," said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

"Fed funds futures currently price around a 95% probability of a 25bp cut and 5% for a 50bp cut. Bets that the Fed would hold off due to inflation risks are now largely off the table."

Friday August 15

INTERIM DIVIDEND PAYMENT DATE

Victorian Plumbing Group

QUARTERLY PAYMENT DATE

Primary Health Properties, Thor Explorations Ltd (DI)

INTERNATIONAL ECONOMIC ANNOUNCEMENTS

Business Inventories (US) (15:00)

Capacity Utilisation (US) (14:15)

Import and Export Price Indices (US) (13:30)

Industrial Production (US) (14:15)

Retail Sales (US) (13:30)

NY Empire State Manufacturing Index (US) (13:30)

Wholesale Price Index (GER) (07:00)

AGMS

Safestay, The Global Smaller Companies Trust

FINAL DIVIDEND PAYMENT DATE

CMC Markets, CML Microsystems, Halma, ProVen Growth & Income VCT, ProVen VCT, Telecom Plus