4th Sep 2015 06:00
LONDON (Alliance News) - UK stocks are set to open lower Friday as investors gear up for an important US jobs report later in the day which will help signal the likelihood of a US Federal Reserve rate hike in their September meeting.
At 1330 BST, the US Department of Labor will release nonfarm payroll, unemployment and wages data. The nonfarm payrolls number is expected to show 220,000 jobs were created in August, slightly higher than the 215,000 in July. The unemployment rate is expected to drop to 5.2% from 5.3% in July, while average hourly earnings are expected to grow 0.2% month-on-month, matching the growth seen in July.
Heightened emphasis will be placed on the August jobs report after the Fed said in the minutes of its July policy meeting that it "anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen some further improvement in the US labour market and is reasonably confident that inflation will move back to its 2% objective over the medium term".
IG says futures indicate the FTSE 100 to open lower at 6,117.2. The index closed up 1.8% at 6,194.10 on Thursday, cheered by a doveish press conference by European Central Bank President Mario Draghi in which he said the central bank stands ready to act again to spur growth and inflation in the eurozone.
The ECB maintained it has "a willingness" to act using all the tools at its disposal to meet its annual inflation target of just below 2%, including adjusting "the size, composition and duration" of its EUR1.1 trillion monetary stimulus programme, Draghi told a press conference after the ECB maintained all of its key interest rates unchanged.
Ahead of the US data, eurozone GDP will be in focus at 1000 BST. The reading is expected to show a 1.2% rise year-on-year in the second quarter, matching the preliminary estimate and slightly accelerating from the 1.0% growth seen last quarter. On a quarterly basis, GDP is expected to inch up 0.3% compared to the 0.4% rise in the first quarter.
Wall Street closed mostly higher on Thursday. The DJIA and the S&P 500 both closed up 0.1% while the Nasdaq Composite ended down 0.4%.
In Asia, the Japanese Nikkei is down 2.3%. Hong Kong returned to trade after a holiday on Thursday and the Hang Seng index trades down 0.9%. The Shanghai Composite remains closed to celebrate the 70th anniversary of China's victory over Japan in the Second World War.
In the UK corporate calendar, the only scheduled release is from healthcare software and services company EMIS which reports half-year results.
In the economic calendar, aside from US unemployment data and eurozone GDP, there are German factory orders at 0700 BST.
By Neil Thakrar; [email protected]; @NeilThakrar1
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