London pre-open: Stocks seen muted ahead of US payrolls
London stocks looked set for a muted open on Friday as investors eyed the release of the latest US non-farm payrolls report.
The FTSE 100 was called to open nine points lower at 7,262. The index fell on Thursday, missing out on the broader market rally, which was fuelled by optimism over Sino-US trade talks, as sterling hit a five-week high on expectations of a Brexit delay.
Ipek Ozkardeskaya, senior market analyst at London Capital Group, said: "In focus today, the US non-farm payrolls data could beat the soft market expectations. A consensus of analyst expectations points at 160,000 new non-farm jobs in August, versus the past 12-month average of 190,000. A strong NFP read near or above 200,000, could further soothe the dovish Fed expectations and boost the US dollar and the sovereign yields.
"But a deeper look into the US jobs market hints that things may not be going as well in the coming months. In its latest monthly report, staffing firm Challenger, Gray & Christmas warned that US companies plan to eliminate more than 10,000 jobs, citing the ‘trade difficulties’ as the root cause of the upcoming job losses for the first time."
On home turf, Prime Minister Boris Johnson said on Thursday that he would rather be "dead in a ditch" than ask the EU for another Brexit delay.
"According to the latest news, Johnson will be seeking Parliament’s support next Monday for a snap election before the European summit, with the idea of driving the country out of the EU by October 31st if he wins. But the chances of a snap election get slim as Johnson loses support of the MPs by the day," said Ozkardeskaya.
The payrolls report is due at 1330 BST, along with the unemployment rate and average earnings. In the UK, Halifax house price figures for August are out at 0830 BST.
In corporate news, house builder Berkeley said first quarter market conditions in London and the South East had remained robust although Brexit worries and high transaction costs were constraining the wider market.
Mining engineer Weir Group said it had won a £100m order to provide crushing and pump equipment to the Iron Bridge magnetite project in the Pilbara region of Western Australia.
SIG reported a 5% fall in interim revenue as it battled falling construction activity in the UK, but cost discipline and restructuring helped the group's underlying profit before tax increase by 20% to £30.0m.
The building materials supplier said it expects a stronger second half performance, although political and economic uncertainty continues to increase.