(Alliance News) – Stocks in London are set to open lower on Friday, ahead of US non-farm payrolls later in the day, a key piece of data to understand the country’s economic health, which could influence the US Federal Reserve at its December meeting.
“This economic reading is attracting the most attention from investors and traders, as the economic data sets the tone for trading today and influences it for the rest of the month. As always, the Fed will be watching this data very closely. “said Naeem Aslam at AvaTrade. .
IG says futures indicate the FTSE 100 large cap index will open down 12.69 points, or 0.2%, at 7,545.80 on Friday. The FTSE 100 index closed down 14.56 points, 0.2%, at 7,558.49 on Thursday.
The nonfarm payrolls report comes a day after new data showed the U.S. manufacturing sector suffered a slowdown in November.
The S&P Global US Manufacturing Purchasing Managers Index fell to 47.7 points in November from 50.4 in October. Falling below 50.0 unchanged, this shows that the sector is in contraction. However, the reading was largely in line with a flash estimate of 47.6.
“A combination of the rising cost of living, higher interest rates and growing fears of recession has led to a drop in demand for goods both at home and abroad. Businesses are reducing therefore producing them at a pace not seen since the global financial crisis, if initial pandemic lockdowns are ruled out,” explained Chris Williamson, chief economist at S&P Global Market Intelligence.
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%.
In early morning trading, the US dollar was mixed.
The euro was trading at $1.0529 early Friday, higher than $1.0487 late Thursday. Against the yen, the dollar was quoted at 135.11 JPY, down from 135.93 JPY.
Meanwhile, the pound was trading at $1.2236 early Friday, below $1.2266 at the London stock close on Thursday.
UK retail footfall suffered a steeper decline in November as railway strikes added a wall of concern for the sector, which is hoping for a festive boost this month.
The latest British Retail Consortium-Sensormatic IQ monitor showed retail footfall fell 13% from pre-virus levels last month, worse than the three-month average drop of just under 12%.
High street footfall alone fell 14% from three years ago, worse than the three-month average of just over 12%. In shopping centres, footfall was down 23%, largely in line with the three-month average. In retail parks, the number of visitors fell by 4.2%, compared to a three-month average of 2.7%.
“Traffic stumbled further as the cost of living crisis deterred some consumers from going to the stores in November. Others chose to stay home due to the dispersal of the rail strikes, or chose the Cup of the world rather than shopping visits. Many major cities have been hit particularly hard, with Birmingham, Bristol and Manchester all seeing the biggest drops in footfall since January,” said BRC chief executive Helen Dickinson.
In Asia on Friday, stocks were in the red. The Japanese Nikkei 225 index fell 1.6%. In China, the Shanghai Composite Index and the Hang Seng Index in Hong Kong both fell 0.3%. The S&P/ASX 200 in Sydney fell 0.7%.
IMF chief Kristalina Georgieva has warned that the likelihood of global growth falling below 2% – last seen during the coronavirus outbreak and the 2009 global financial crisis – is increasing as major economies are slowing down.
His comments come as the world’s largest economies grapple with the fallout from Russia’s invasion of Ukraine, which has sent food and energy prices skyrocketing, as well as a spike in inflation and a slowdown in China.
“The likelihood of growth slowing even further, falling below 2% was one in four,” Georgieva said at the Reuters NEXT conference on Thursday, referring to the fund’s recent expectations for 2023.
Gold was quoted at $1,799.20 an ounce early Friday, higher at $1,796.43 on Thursday.
Brent oil was trading at $86.95 a barrel early Friday, down from $88.89 late Thursday.
EU member states are close to agreeing a price cap of $60 a barrel for Russian oil, with only Poland remaining to give the final nod.
Europe will begin enforcing an embargo on shipments of Russian crude from Monday, so the price cap will apply to oil exported by sea from Moscow to ports around the world.
In Friday’s business calendar for London, there are half-year results from behavioral science firm Mind Gym and property investor Industrials REIT, and full-year results from asset manager Premier Miton Group.
In the economic calendar, EU producer inflation figures are released at 10:00 GMT ahead of US non-farm payrolls for November at 13:30 GMT.
By Heather Rydings; [email protected]
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