FTSE higher on Fed hopes

In London, equities are in the black this morning with dealers optimistic that the US Federal Reserve will keep its stimulus policy unchanged at tomorrow’s meeting.

The Fed’s current monetary policy is very expansionary, with low interest rates and a stimulus package of $85 billion per month. Traders are currently bullish on equities as they believe the Fed will keep its policy the same, partially because last month US unemployment ticked up to 7.6%.

Overnight, the Reserve Bank of Australia kept interest rates at their record low of 2.75%, adding that there would be room for further rates cuts. This boosted confidence as cheaper borrowing costs encourage economic activity.

In corporate news, Whitbread announced a 3.1% rise in first-quarter like-for-like sales, with group revenue helped by the cold weather as consumers flocked to taste Costa Coffee’s hot drinks. The share price is up 2.8% so far today.

Temporary power supplier Aggreko is down 1.7% this morning despite saying it's on track to meet full-year expectations.

Meanwhile, HSBC’s upgrade by Citigroup not only lifted the share price of the bank but the sector as a whole.

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