Stock markets were marginally lower early Friday, ahead of the key monthly US jobs report, but oil prices continued to fall back toward $100 a barrel on a plan to release strategic reserves.
The US is expected to have added 490,000 jobs in March, according to FXStreet consensus, which would be down from 678,000 in February. The data is due out at 1330 BST.
‘While there are some downside risks related to lingering supply issues in the labour market, our economist still expects a 500k headline nonfarm payroll reading today, in line with the consensus at 490k. In our view, this should be enough to help markets cement expectations around two 50bp rate hikes in May and June, which is also our base-case scenario,’ said Dutch bank ING.
The dollar was buoyant heading into the US jobs release.
Sterling was quoted at $1.3118 early Friday, lower than $1.3155 at the London equities close on Thursday. The euro traded at $1.1049, down from $1.1111 late Thursday. Against the yen, the dollar rose to JP¥122.58 from JP¥121.43.
The FTSE 100 index was down 7.47 points, up 0.1%, at 7,523.15 early Friday. The mid-cap FTSE 250 index was up 108.27 points, or 0.5%, at 21,268.34. The AIM All-Share index was up 2.15 points, or 0.2%, at 1,044.51.
The Cboe UK 100 index was down 0.1% at 748.74. The Cboe 250 was up 0.5% at 18,722.29, and the Cboe Small Companies down 0.1% at 15,338.21.
In mainland Europe, the CAC 40 in Paris was up 0.1%, while the DAX 40 in Frankfurt was up 0.5% early Friday.
Holding back the FTSE 100 were BP and Shell, down 1.5% and 1.1% respectively. The two energy firms were tracking the price of oil lower, with a barrel of Brent quoted at $102.91 a barrel early Friday, down from $108.02 late Thursday.
US President Joe Biden announced Thursday a record release from US strategic oil reserves to ‘ease the pain’ of soaring domestic fuel prices, saying the ‘wartime’ measure will defuse Russia's leverage as an energy power.
Biden laid out the giant release - a million barrels of US government oil every day for six months - in a speech in which he blamed Russian President Vladimir Putin for causing fuel cost increases and also accused big oil companies of putting profits ahead of the national interest.
Biden also aimed strikingly tough comments at oil companies, which he said were hoarding supply.
‘This is not the time to sit on record profits,’ he said. ‘Provide some relief for your customers, not investors and executives.’
Friday's easing oil prices will come as some relief as UK consumers grapple with the biggest jump in domestic energy bills in living memory.
A 54% increase to Ofgem's price cap hits energy bills from Friday after the regulator was forced to hike the cap to a record £1,971 for a typical household as gas prices soared to unprecedented highs.
Elsewhere in London, Bridgepoint shares rose 5.4% after Citigroup raised the private equity investment firm to Buy from Neutral.
Frasers rose 2.3% after the retailer unveiled a new share buyback programme that will run until late-April.
A share repurchase programme worth up to £70.0 million begins on Friday and ends on April 24, the day before the retailer ends its financial year. The company, which owns store brands such as Sports Direct and Evans Cycles, said the maximum amount of shares that can be bought through the buyback is 10.0 million.
Numis fell 6.1% after the stockbroker said interim revenue is expected to decline on a record performance a year before, with the firm confident on the M&A outlook but more cautious on capital markets.
Revenue in the six months to the end of March is expected to be around £74 million, down 36% on the record performance achieved in the same period a year ago.
M&A and Growth Capital Solutions delivered ‘strong’ revenue in line with a year ago, Numis said, but this was offset by a decline in equity capital markets activity across the industry which hurt Investment Banking performance.
The outlook for M&A in the second half is positive, with the London-based stockbroker and investment bank describing its pipeline as strong.
‘The outlook for capital markets is less certain, however, markets have mostly recovered to levels apparent before the war in Ukraine, which gives us some confidence that market activity will recover to some extent during the second half. Whilst we do not anticipate IPOs to feature prominently in the near term, the current pipeline reflects the ambition of our broad corporate client base to finance their inorganic growth strategies,’ Numis said.
In Asia on Friday, the Japanese Nikkei 225 index closed down 0.6%. In China, the Shanghai Composite ended up 0.9%, while the Hang Seng index in Hong Kong was down 0.4% in late trade. The S&P/ASX 200 ended down 0.1%.
Gold was quoted at $1,930.50 an ounce early Friday, lower than $1,941.55 on Thursday.
The economic events calendar on Friday has manufacturing PMI readings from the eurozone at 0900 BST, the UK at 0930 BST, and the US at 1445 BST, though the US nonfarm payrolls figure will dominate attention.
By Lucy Heming; lucyheming@alliancenews.com
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