Early Morning Call: FTSE 100 opens higher as Lloyds beats expectations in Q1

Equity market overview

Asia-Pacific equity markets fell overnight.

Tech stocks weighed on the Hang Seng and Australia’s S&P/ASX 200 for a second day. The Nikkei was closed as Japan celebrated Constitution Day.

Fed on rates

Tonight, the Federal Funds Rates are expected to rise by 25-basis points (bp) to a target range of 5%-5.25%. Stubborn inflation remains the single biggest risk to long-term economic problems. This remains the priority over a recession which is the short-term pain that has to be endured.

Before the conclusion of the Federal Open Market Committee (FOMC) meeting, the market awaits latest ADP employment change data and ISM services PMI.

Earnings

Elsewhere on the equity market, Lloyds Banking Group beat profit expectations for the first quarter (Q1), with a pretax profit of £2.3 billion, above the £1.95 billion average of analyst forecasts compiled by the bank. Net income rose 15% to £4.7bn.

In France, BNP Paribas' profit more than doubled in the first quarter compared to a year ago, after the sale of its US division. The sale of Bank of the West yielded about €2.95Bln in capital gains, lifted the bank's net income to €4.44Bln, in line with expectations.

Deutsche Lufthansa expects strong demand for holiday travel this summer and sees significant year-on-year (YoY) improvement in adjusted EBIT for the full-year. The German airline group posted an adjusted quarterly EBIT loss of €273 million, after a €577Mln loss in the previous period. Analysts’ consensus was €-279Mln. Revenues jumped 40% to €7.02Bln, falling short of consensus for €7.57Bln.

Ryanair said traffic increased by 13% in April to 16 million customers. Load factor rose by three percentage points to 94%.

In the US, Ford Motor fell in extended trading last night after being cautious in its outlook. Ford confirmed its full-year guidance but cautioned that "higher industrywide customer incentives as vehicle supply-and-demand rebalances" will be a "headwind" for profitability. T

he carmaker posted better-than-expected earnings for the first quarter. Adjusted diluted earnings per share (EPS) were 62 cents, compared with 38 cents a year ago. Analysts had expected 40 cents. Revenue also beat expectations.

Advanced Micro Devices fell 6.2% last night after its sales guidance missed market expectations. The chipmaker posted earnings of 60 cents per share on revenue of $5.40Bln, both lines beating estimates. But AMD missed analysts' estimates for PC and data centre chips sales for the first quarter.

AMD CEO Lisa Su told investors that the first quarter was the bottom of the market for the company's PC business and the industry, and remained confident in the group's ability to grow in the second half of the year.