FTSE 100 preview: Markets shrug off disappointing US jobs report

on Feb 10, 2014
Updated: Apr 9, 2020

iNVEZZ.com, Monday, February 10: Optimism seems to be returning to equity markets following two weeks of turmoil, as investors are attributing the lower-than-expected US non-farm payroll additions in January to bad weather and not a slowdown in the US economic recovery. Moreover, some traders hope that the weak jobs numbers will lead to the Federal Reserve’s new chair Janet Yellen reducing the pace of QE withdrawal or even pausing on tapering within the next few meetings.

Britain’s benchmark equity index, the FTSE 100, is expected to open around 22 to 28 points, or about 0.4 percent, higher today, according to data from financial bookmakers. On Friday, the Footsie recorded a third straight day of gains, rising 13.40 points, or 0.2 percent, to end at 6,571.68 following significant losses in the past two weeks, caused by signs of an economic slowdown in the world’s two largest economies, the US and China. The blue chip index plunged immediately after the non-farm payrolls report, which showed that just 113,000 jobs were added last month, well below market expectations of 180,000 to 185,000 payroll additions (FTSE 100 watch: UK stocks lose ground after weak US payrolls data).

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“There are algos that sell immediately after the payrolls number if it’s weaker than expected, but then people look at the overall picture, which is not that bad, and buy back on the dips,” Mike Reuter, a broker at Tradition, told Reuters.
**Global markets**
US stocks rose on Friday, recording their first weekly gain in four weeks. Investors blamed the extremely cold weather for the poor payrolls data and remained hopeful that a better jobs picture will unfold in the spring and that the Fed could take a more cautious stance towards QE tapering. Yellen delivers her first testimony to the House on Tuesday and the Senate on Thursday and her first public comments since taking over as Fed chair are eagerly awaited.

The benchmark S&P 500 Index rose 1.33 percent to close at 1,797.02, the Dow Jones Industrial Average gained 1.06 percent to 15,794.08, and the NASDAQ Composite Index climbed 1.69 percent to end the session at 4,125.86.
Asian markets were mostly higher overnight, grasping optimism from Wall Street. Japan’s benchmark index, the NIKKEI 225, rose 1.77 percent to close at 14,718.34, with a weakening of the yen contributing to the rise in equities.

There are no FTSE 100 companies scheduled to report today.
Economic data scheduled for release today includes French and Italian industrial production, the Eurozone’s Sentix investor confidence indicator, Irish Construction PMI and regional PMIs for the UK.
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