Early Morning Call: FTSE 100 opens lower as UK consumer confidence shows persisting financial gloom

Consumer confidence, CPI

UK consumer confidence rose this month to its highest level since March last year.

GfK's consumer confidence index rose to -36 in March, in line with expectations, up from -38 in February. Still, the GfK survey showed no improvement in its gauges of personal finances.

In the Gfk statement, client strategy director Joe Staton underlined that "a small improvement in the overall index score this month masks continuing concerns among consumers about their personal financial situation. Wages are not keeping up with rising prices and the cost-of-living crisis remains a stark reality for most".

Last month UK consumer price index (CPI) unexpectedly rose 10.4% year-on-year (YoY). UK retail sales rose more than expected in February, by 1.2% month-on-month (MoM). Economists anticipated a 0.2% gain. Compared to February 2022, the index declined 3.5%.

In Japan, the yen strengthened after the headline consumer price index rose by 3.3% in February, decelerating from January's 41-year high of 4.3%. The latest figure also marked the lowest print since last September.

Core CPI, which excludes fresh food but includes fuel costs, also decelerated sharply in February, showing a 3.1% increase. But the so called "core-core" index, which strips away food and energy costs, hit a four-decade high, rising 3.5% YoY, after 3.2% the previous month. This is the index the Bank of Japan (BoJ) takes into consideration when it makes its decision on rates. This index is now exceeding the Bank of Japan's 2% target for a fifth straight month.

PMI

It is PMI day today in Europe and the US, where S&P global manufacturing PMIs are expected to remain below 50 in March.

In Japan, manufacturing activity contracted for a fifth straight month in March. The Jibun Bank manufacturing PMI rose to a seasonally adjusted 48.6 in March, from a final 47.7 in the previous month.

Equities

Elsewhere on the equity market, JD Wetherspoon returned to half-year (H1) profit. The British pub chain reported a profit of £4.6 million for the six months ended 31 December, compared with a loss in the same period a year ago.

Watch out for Smiths Group at the open. The industrial technology company posted a 27% jump in first-half profit and upgraded its forecast for the full-year (FY).

TUI announced the launch of a €1.8 billion capital increase for the repayment of state to strengthen its balance sheet. 328.9 million new ordinary shares will be offered at €5.55 a piece.

Commodities

On the commodity market, oil prices are little changed this Friday. Investors now await Baker Hughes data. Last week, total rig count rose to 754 from 746 on the previous one. The number of oil rigs in operation however decreased by one to 589.

Industrial metals have benefitted from the weakness of the dollar. Copper has risen to a three-week high. Aluminium and zinc also recorded gains.