(Alliance News) - Stocks in London are set to edge higher on Friday, after a spike in yields prompted a sell-off on Thursday.
IG says futures indicate the FTSE 100 to open up 5.0 points at 7,285.50 on Friday. The index of London large-caps closed down 161.60 points, or 2.2%, to 7,280.50.
"This week has been an awful week for European markets, on course for their worst weekly performance since March, the DAX fell to its lowest levels in 3 months, while the FTSE100 slipped to within touching distance of its March lows," said CMC Markets' Michael Hewson.
The latest batch of US Federal Reserve meeting minutes were demonstrably hawkish, sending Treasury yields higher. Gilt yields also stretched as investors price in a higher terminal benchmark interest rate in the UK.
In the US on Thursday, Wall Street ended in the red, with the Dow Jones Industrial Average down 1.1%, the S&P 500 down 0.8% and the Nasdaq Composite down 0.8%.
"While the catalyst for yesterday's sell-off was the release of the Fed minutes, which showed a much greater caucus for further tightening than was thought, the direction of travel was given added momentum with the release of a red-hot ADP payrolls, and ISM services report, which showed the US labour market is still strong and likely to continue to do well," Hewson continued.
On Thursday, numbers from payroll processor ADP showed US private sector employment grew by almost half a million jobs.
Employment grew by 497,000 in June, rising from 278,000 in May.
Nonfarm payrolls data is released 1330 BST on Friday. Numbers are expected to show that employment growth slowed to 225,000 last month, from 339,000 in May.
"The resilience of the jobs market has also been a little embarrassing for the economics profession, with the headline jobs report number, comfortably beating forecasts for the 14th month in succession...Will today follow a similar pattern?" Hewson questioned.
The dollar was weaker in early exchanges in Europe.
Sterling was quoted at USD1.2745 early Friday, firming from USD1.2690 at the London equities close on Thursday. The euro traded at USD1.0892, higher than USD1.0858. Against the yen, the dollar was quoted at JPY143.71, down versus JPY144.23.
In Asia on Friday, the Nikkei 225 index in Tokyo was down 0.5%. In China, the Shanghai Composite was up 0.1%, while the Hang Seng index in Hong Kong was down 0.4%. The S&P/ASX 200 in Sydney was down 1.6%.
US Treasury Secretary Janet Yellen begins a full day of meetings in Beijing including with Premier Li Qiang on Friday, as Washington seeks to steady the tense relationship between the world's top two economies. Yellen's four-day trip is her first to China as Treasury chief, and she is the second high-ranking US official to visit the country after Secretary of State Antony Blinken last month.
Despite recent tensions between the two nations, Beijing has struck an optimistic tone about Yellen's visit, with China's finance ministry saying Friday it would serve to "strengthen communication and exchange between the two countries".
Gold was quoted at USD1,913.36 an ounce early Friday, higher than USD1,909.01 on Thursday.
Brent oil was trading at USD76.89 a barrel, higher than USD75.23.
In addition to US payrolls, the economic calendar has German industrial production data and the latest UK Halifax house price index at 0700 BST. Irish gross domestic product data is reported at 1100 BST.
Friday's local corporate has a trading statement from housebuilder and land investor MJ Gleeson.
By Elizabeth Winter, Alliance News senior markets reporter
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