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London pre-open: Stocks seen up ahead of data slew; Fed minutes in focus

(Sharecast News) - London stocks were set to edge higher at the open on Thursday after a negative close the previous day, as investors eyed a slew of UK data releases. The FTSE 100 was called to open up around 10 points, having closed 0.5% lower on Wednesday.

Investors will likely mull the latest minutes from the Federal Reserve released overnight. They showed that the Federal Open Market Committee said that rate cuts were likely to happen this year, but didn't give any details on when the central bank might start to loosen monetary policy.

Minutes of the FOMC's 12-13 December meeting showed that "almost all participants indicated that, reflecting the improvements in their inflation outlooks, their baseline projections implied that a lower target range for the federal funds rate would be appropriate by the end of 2024".

However, the Fed said that members' outlooks were "associated with an unusually elevated degree of uncertainty" and that rate hikes could be appropriate if things take a turn for the worse.

Market participants will also be digesting the latest data out of China, where the Caixin services PMI rose to 52.9 in December from 51.5 in November, coming in above consensus expectations of 51.6.

On the UK macro front, net lending, consumer credit, mortgage approvals and the S&P Global/CIPS services PMI are all due at 0930 GMT.

In corporate news, fashion retailer Next lifted annual guidance after better-than-expected full-price sales during November and December.

Full-price sales in the nine weeks to December 30 rose 5.7% year-on-year, £38m better than previous guidance of a 2% rise.

Annual pre-tax profit increased by £20m to £905m. Of the £20m increase, £17m came from the sales beat to date and £3m from an upgraded forecast for full-price sales in January.

"Cost price inflation in our own products is diminishing, mainly as a result of decreasing factory gate prices. We believe that this will allow us to maintain zero inflation in selling prices, along with a small increase in bought in gross margins. This will be the first time in three years that input prices have been stable," the company said.

However, it also warned of possible delays to stock deliveries in the early part of the year if attacks on shipping in the Red Sea by Iran-backed Yemeni Houthi militants force container vessels to avoid the Suez Canal.

Sports fashion retailer JD Sports delivered a profit warning after second-half trading missed expectations due to milder autumn weather and heavier discounting over the peak holiday shopping season.

The company said the "elevated level of promotional activity" during the peak trading period means that full-year gross margins would be slightly lower than last year, leading it to cut adjusted pre-tax profit guidance to £915-935m, from £1.04bn at the half-year stage.

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