(Alliance News) - Stocks in London are set to open slightly lower on Tuesday, as investors nervously await Wednesday's US inflation print.

IG says futures indicate the FTSE 100 to open down 2.5 points at 7,940.97 on Tuesday. The index of London large-caps closed up 32.31 points, 0.4%, at 7,943.47 on Monday.

UK retail sales improved in March, largely driven by an early Easter but providing a boost to firms after a difficult start to the year, figures suggest.

Total UK retail sales were up by 3.5% on last March, above the three-month average of 2.1% and the 12-month average of 2.9%, according to the British Retail Consortium-KPMG retail sales monitor.

Food sales increased by 6.8% year on year, driven by Easter falling unusually early and the subsequent uplift ahead of the long weekend.

In the US on Monday, stocks stood still as investors awaited inflation figures on Wednesday that will likely dictate whether rate cuts in the first half of 2024 are feasible or not.

The Dow Jones Industrial Average and the S&P 500 closed down slightly, while the Nasdaq Composite closed up slightly.

On Wednesday, US consumer prices figures are due followed on Thursday by wholesale prices data. The reports come in the wake of blow-out non-farm payrolls numbers on Friday which tilted the balance against an interest rate cut in June.

SPI Asset Management's Stephen Innes said the inflation reading "is arguably the most critical economic print of the year."

"Investors eagerly await this report in hopes that it will offer more insights into the Federal Reserve's potential timeline for rate cuts and the frequency of such cuts. The big problem hiding in plain sight is that a larger segment of the investment community is even considering the prospect of no rate cuts this year, adding further uncertainty to the market outlook," Innes added.

Sterling was quoted at USD1.2657 early Tuesday, higher than USD1.2652 at the London equities close on Monday.

The euro traded at USD1.0857 early Tuesday, higher than USD1.0854 late Monday. Against the yen, the dollar was quoted at JPY151.89, up versus JPY151.82.

In Asia on Tuesday, the Nikkei 225 index in Tokyo was up 0.9%. In China, the Shanghai Composite was down 0.3%, while the Hang Seng index in Hong Kong was up 0.6%. The S&P/ASX 200 in Sydney closed up 0.5%.

Gold was quoted at USD2,346.77 an ounce early Tuesday, higher than USD2,330.93 on Monday. Gold hit a new record high on Monday, above USD2,350 per ounce before easing back.

Brent oil was trading at USD90.53 a barrel early Tuesday, higher than USD89.93 late Monday.

In Tuesday's UK corporate calendar, Imperial Brands releases a trading statement.

The economic calendar week has consumer and producer price inflation data for the US out on Wednesday and Thursday respectively, while inflation figures for China and the latest European Central Bank interest rate decision are also out on Thursday. On Friday, German CPI is out, alongside UK gross domestic product data.

By Sophie Rose, Alliance News senior reporter

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