London pre-open: Stocks seen muted ahead of payrolls
London stocks were set for a steady open on Friday as traders digest news that US President Trump has accepted an offer to meet North Korea’s Kim Jong Un and ahead of the release of the key non-farm payrolls report.
The FTSE 100 was called to open unchanged at 7,203.
Trump has agreed to meet with Kim Jong Un by May for talks about its nuclear weapons, according to reports.
CMC Markets analyst Michael Hewson said: "While it is easy to be cynical, one can’t help feeling these talks could well go the same way as previous attempts but nonetheless it will be interesting to see how this one plays out."
Investors will also be looking ahead to the latest non-farm payrolls report. Hewson said Wednesday’s ADP report suggested that there might still be a significant amount of slack in the US labour market, with a strong 235,000 print, following on from a January print of 244,000.
"In recent months there hasn’t been a great correlation between these two reports but nonetheless they have still been averaging near to the 200k jobs a month level. The January payrolls saw 200k new jobs added and a similar number is expected in the February figures, with 205k jobs expected.
"Ultimately it’s not the headline jobs number that is likely to be the primary market mover here, it’s the average hourly earnings data and markets will be looking to see if the jump to 2.9% in January is sustained in the February numbers, with 2.8% expected. This would probably be sufficient to keep the 4 rate rise expectation for 2018 on the table after the jump from 2.5% in December.
"A sharp fall back towards that 2.5% would suggest that the rise in wages might be a one off, and would be a surprise given recent surveys from the latest ISM and Beige Book which suggested that wages pressure is rising."
The non-farm payrolls report, unemployment rate and average hourly earnings are all at 1330 GMT. Before that, UK industrial production, manufacturing production and trade balance are at 0930 GMT.
In corporate news, satellite operator Inmarsat said it would be cutting its annual dividend to 20 cents a share as it cited “the lack of visibility” over future cash payments from the US 5G Ligado Networks beyond the end of 2018 and the need to take advantage of the growing in-flight wi-fi market.
The company said it would pay a final dividend of 12 cents a share, making a total of 33.62 cents per share.
Sports betting and gaming company GVC Holdings, which received shareholder approval for its merger with Ladbrokes Coral this week, posted a rise in full-year adjusted profit and net gaming revenue on Friday, thanks in part to the acquisition of Bwin.
In the year to the end of December 2017, adjusted pre-tax profit jumped 182% to €178.7m while net gaming revenue increased 17% to €925.6m.
SIG, the building products supplier, reported a 10% decline in underlying profits and cash flow shrinking by a third as the UK market becomes "increasingly challenging".
However, due to a more buoyant mood in Europe and Ireland, the FTSE 250 group sees "considerable potential for a significant improvement in operational and underlying financial performance" for 2018.