Markets are expected to open lower on Friday morning as investors adopt a cautious approach ahead of the all-important US jobs report, with a recovery in the labour market seen as a deciding factor in the Federal Reserve’s impending withdrawal of stimulus.
City sources predict the FTSE 100 will open down around 10 points from yesterday’s close of 6,532.4.
US data released Thursday threw more weight behind the argument to begin tapering asset purchases at the Fed’s next meeting later this month – jobless claims fell more than forecasts, factory orders declined less than expected and the ISM non-manufacturing index smashed estimates.
However, given that the Fed has explicitly called for an improvement in labour conditions before it begins to scale back quantitative easing, analysts will be watching the August employment report – due out on later this afternoon – very carefully.
‘A lot of people in the markets have been convinced for weeks that the Fed will scale back its asset purchases at the next meeting in September, but the number has increased significantly in the last week or two,’ said Market Analyst Craig Erlam from Alpari.
‘A strong jobs report today would just be the icing on the cake really, leaving many with little doubt that the Fed will taper come September.’
Stocks to watch
Engineering and project management company AMEC has scored a contract with TAQA for work on the Tern oil production platform in the North Sea. AMEC will conduct engineering, procurement and construction of modifications to the platform to accommodate a new subsea tie-back to the Cladhan field in the northern North Sea.
Bwin.party has launched its new website, partypoker.com, marking a ‘significant first step’ in the merging of social media and real money gaming. The first phase of been released on Mac and PC, with a mobile version also available for the first time
Matchtech, the AIM-listed engineering staffing firm, is expanding through the acquisition of Provanis, a niche technology recruitment business. Matchtech has bought the entire issued share capital of Application Services, which trades as Provanis, for £4m.