9th Jan 2015 07:37
LONDON (Alliance News) - London stocks are set to open lower Friday ahead of December's US jobs report, as lingering concerns about the state of the global economy return to the fore.
Mixed data from China overnight pointed to a further slowdown in the world's second-largest economy, and German industrial output fell.
The FTSE 100 is called to open 8 points lower at 6,561.8, ending a two-day run of gains. The index closed up 2.3% Thursday.
Producer prices in China fell in December, dropping 3.3% from a year earlier, picking up speed from a fall of 2.7% in November. Consumer prices rose 1.5% on the year in December, in line with forecasts. However, for the full year, the country's consumer price index rose 2.0%, below the central bank's 3.5% annual inflation target.
"Regardless of the oil price fall, the fact that domestic prices are also so weak is of course a cause for concern for China, with growth still struggling," says James Hughes at Alpari.
Brent crude remains in focus and is steady at around USD51.06 a barrel after Wednesday's brief dip below USD50 to touch USD49.52 a barrel. US benchmark West Texas Intermediate fell to a low of USD46.80 a barrel Wednesday and was quoted at USD49.09 early Friday.
The focus Friday is on US non-farm payrolls for December, the main indication of employment over the Christmas period.
"An extremely positive number could cause some ripples particularly given the timing of a Fed rate hike, as it would suggest that any slack in the US labour market could disappear faster than anticipated, and risk the possibility of an earlier rate hike," says Michael Hewson at CMC Markets.
German industrial production dropped 0.1% on the month in November as energy output fell, adding to the prospect of increased stimulus measures from the European Central Bank. Trade balance figures for Germany showed a 2.1% drop in exports from Europe's largest economy in November, while imports rose 1.5%.
France publishes the same indicators at 0745 GMT and the UK numbers come at 0930 GMT.
In corporate news, The Restaurant Group said its full-year results will show "material growth" in both earnings and cash flow, boosted by revenue growth and new restaurant openings. The owner of the chains Frankie & Benny's, Chiquito, Coast to Coast and Garfunkel's also gave a confident outlook for the current financial year as revenue grew 9.6% in the year to December 28.
Asian markets were mixed overnight, with the Nikkei ending up 0.2% at 17,197.73. The Hang Seng in Hong Kong is up 0.6% at 23,975.6 in choppy trade and the Shanghai Composite is down 0.2% at 3,285.412.
By Ian Edmondson; [email protected]
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