Stocks seen higher ahead of key US jobs data

(Alliance News) - Stocks in London are set to open higher on Friday as markets looked ahead to a data-heavy day.

IG says futures indicate the FTSE 100 to open 19.67 points, or 0.3%, higher at 7,458.80 on Friday. The index of London large-caps closed down 34.54 points, 0.5%, at 7,439.13 on Thursday.

The economic calendar has a slew of manufacturing purchasing managers' index prints, starting with France at 0850 BST. However, the main event for markets will be the release of US employment data at 1330 BST.

Michael Hewson, chief market analyst at CMC Markets, said the non-farm payrolls report shows a "modest slowdown" in the rate of jobs growth, similar to that seen in the ADP jobs report earlier in the week, then there is a "very real sense" there could be further gains in stock markets, as bets increase that the Federal Reserve may be done when it comes to further rate hikes.

"At the very least it could go some way to signalling a pause as the US central bank looks to assess the effects recent rate hikes are having on the US economy," he said.

Currently, markets see a 89% chance of the US central holding rates steady at its next meeting this month and a 56% chance of this being the case again in the Fed's November meeting, according to the CME Fed Watch Tool.

The dollar was little changed ahead of the payroll numbers. Sterling was quoted at USD1.2668 early Friday, down from USD1.2671 at the London equities close on Thursday. The euro traded at USD1.0847, unchanged from USD1.0847 on Thursday. Against the yen, the dollar was quoted at JPY145.55, lower versus JPY145.65.

In the US on Thursday, Wall Street ended largely lower, with the Dow Jones Industrial Average down 0.5%, the S&P 500 down 0.2% but the Nasdaq Composite up 0.1%.

In Tokyo on Friday, the Nikkei 225 index was up 0.4%. The S&P/ASX 200 in Sydney was down 0.3%.

In China, the Shanghai Composite was up 0.2%, while the Hang Seng index in Hong Kong was unexpectedly closed as Super Typhoon Saola barrelled towards China's southern coast .

The finance hub issued a T8 threat warning – the city's third-highest – around 0240 HKT, and the city's bourse said the" morning trading sessions for all markets will be cancelled".

On China's mainland, authorities issued the highest typhoon warning for the storm, which state media said would make landfall "in the coastal areas stretching from Huilai to Hong Kong" on Friday afternoon or evening.

Brent oil was trading at USD87.03 a barrel early Friday, up from USD85.88 late Thursday. Gold was quoted at USD1,939.95 an ounce, down from USD1,942.51.

In Friday's corporate calendar, there are half-year results from Diversified Energy.

By Heather Rydings, Alliance News senior economics reporter

Comments and questions to [e-mail]

Copyright 2023 Alliance News Ltd. All Rights Reserved.