Share prices opened lower on Friday, as markets await the US non-farm payrolls report, which is expected to influence the US central bank’s next interest rate move.
The US jobs report for November will be published at 1330 GMT. Consensus, as cited by FXStreet, expects non-farm payroll employment to increase by 200,000.
A stronger-than-expected figure, though good for the US economy, could be bad for stock prices, as it would be thought to encourage a larger interest rate hike by the US Federal Reserve at its December meeting. The policy-making Federal Open Market Committee meets next on December 13 and 14.
In a speech on Wednesday, Fed Chair Jerome Powell hinted the central bank may slow its rate hikes from the current pace of 75 basis points per meeting as soon as this month. ‘The time for moderating the pace of rate increases may come as soon as the December meeting,’ Powell said in a speech at the Brookings Institution think tank.
Commented Lloyds Bank about the November jobs report: ‘The October report showed a solid rise in employment, a small move up in the unemployment rate - to a still very low 3.7% - and signs that, while wage growth has levelled off, it remains uncomfortably high compared with the 2% inflation target.
‘We expect a similar outcome for November indicating no significant easing in pressures. That would seem consistent with the Fed‘??s policy guidance that the pace of interest rate hikes will now slow but rates still have further to rise.’
The FTSE 100 index opened down 35.44 points, or 0.5%, at 7,523.05. The FTSE 250 was up 16.46 points, or 0.1%, at 19,425.88. The AIM All-Share was up 2.35 points, or 0.3%, at 852.91.
The Cboe UK 100 was down 0.5% at 751.96, the Cboe UK 250 was up 0.4% at 16,793.12, and the Cboe Small Companies was down 0.4% at 13,196.54.
The dollar was weaker ahead of the US employment data and following a downbeat reading for its manufacturing sector on Thursday.
The S&P Global US manufacturing purchasing managers’ index fell to 47.7 points in November from 50.4 in October. Falling beneath the 50.0 no-change mark, it shows the sector is in contraction. The reading was largely in line with a flash estimate of 47.6, however.
In the wake of the negative PMI reading, Wall Street ended lower on Thursday, with the Dow Jones Industrial Average down 0.6%, the S&P 500 down 0.1% and the Nasdaq Composite down 0.1%.
The euro stood at $1.0539 shortly after the European equities open on Friday morning, higher against $1.0487 late Thursday. Against the yen, the dollar was trading at JP¥133.96, down sharply from JP¥135.93.
The pound was quoted at $1.2296 early Friday in London, higher than $1.2266 at the London equities close on Thursday.
UK retail footfall suffered a sharper decline in November, figures on Friday showed, with rail strikes adding to a wall of worry for the sector, which will be hoping for a festive boost this month.
The latest British Retail Consortium-Sensormatic IQ monitor showed retail footfall slid 13% versus pre-virus levels last month, worse than the three-month average fall of just under 12%.
‘Footfall took another stumble as the cost of living crisis put off some consumers from visiting the shops in November. Others opted to stay home due to the scattering of rail strikes, or chose the World Cup over shopping visits. Many big cities were particularly hard hit, with Birmingham, Bristol and Manchester all seeing the biggest drops in footfall since January,’ BRC Chief Executive Helen Dickinson said.
In London, Associated British Foods rose 2.9% after Goldman Sachs raised the Primark-owner to ’neutral’ from ’sell’, with a price target of 1,900 pence.
GSK fell 0.6% despite reporting that the European Medicines Agency has accepted a marketing authorisation application for momelotinib, its treatment for myelofibrosis, a rare blood cancer.
The pharmaceutical firm also announced positive headline results from a trial investigating Jemperli with standard-of-care chemotherapy followed by Jemperli, when compared to chemotherapy plus a placebo, in adults with primary advanced or recurrent endometrial cancer.
Asos fell 1.4% after IT infrastructure firm Softcat said it appointed Kathryn Mecklenburgh as its new chief financial officer.
Mecklenburgh is currently interim CFO at fast-fashion retailer Asos, but will join Softcat by ‘no later than mid-June’.
Shares in Softcat were up 0.5%.
Elsewhere in London, Bank of Ireland was up 0.3% as it welcomed the approval of Ireland’s minister for finance in regard to its acquisition of the assets and liabilities of KBC Bank Ireland.
The minister’s approval is the final required for the acquisition.
Back in April, Bank of Ireland said it entered talks to buy KBC Group’s Irish unit, as the Belgian bank looked to exit the country. In May, the bank received clearance from the Irish Competition & Consumer Protection Commission for the acquisition.
Ryanair and Wizz Air were down 1.5% and 0.7%, respectively, despite both airlines reporting they carried more passengers in November than during pre-pandemic November three years ago.
Ryanair carried 11.2 million passengers during the past month, up 9.8% from 10.2 million a year ago and up 2.8% from 10.9 million in November 2019.
Wizz Air flew 3.7 million passengers in November, up 70% from 2.2 million a year ago and 24% higher than 3.0 million in November 2019.
In Europe on Thursday morning, the CAC 40 index in Paris was down 0.4%, while the DAX 40 in Frankfurt was down 0.1%.
Stocks in Asia closed lower on Friday after a week dominated by civil unrest and the prospect of relaxing Covid restrictions in China.
The Shanghai Composite closed down 0.3%, and the Hang Seng in Hong Kong closed down 0.3% - though the index ended the week 9.9% higher.
The Nikkei 225 in Tokyo ended down 1.6% and the S&P/ASX 200 in Sydney closed down 0.7%.
Cities across China further unwound Covid restrictions, loosening testing and quarantine rules in the wake of nationwide protests calling for an end to lockdowns and greater political freedoms.
As of Friday, the southwestern metropolis of Chengdu will no longer require a recent negative test result to enter public places or ride the metro, instead only requiring a green health code confirming they have not travelled to a ‘high risk’ area.
In Beijing, health authorities called on Thursday on hospitals not to deny treatment to people without a negative PCR test taken within 48 hours.
Many other cities with virus outbreaks are allowing restaurants, shopping malls and even schools to reopen, in a clear departure from previous tough lockdown rules.
Gold was priced at $1,802.46 an ounce early Friday, significantly higher than $1,796.43 late Thursday. Brent oil was quoted at $86.76 a barrel, lower against $88.89.
EU member states are close to agreeing a $60 dollar per barrel price cap on Russian oil, with just Poland left to give the final nod.
Europe will begin enforcing an embargo on Russian crude shipments from Monday, so the price cap will apply to oil exported by sea by Moscow to ports around the world.
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