FTSE 100 preview: US jobs data and OPEC meeting in focus

on Dec 4, 2015

The FTSE 100 is set for a lackluster start this morning after the milder than expected stimulus measures announced by the European Central Bank (ECB) hurt investor sentiment yesterday.

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The UK benchmark index reversed earlier gains in the previous session to end 114.65 points, or 2.27 percent, lower at 6,275 points, after the ECB failed to deliver on market expectations for an increase in monthly asset purchases. ECB President Mario Draghi announced the asset purchase programme will be extended to March 2017 from September 2016 but will continue at €60 billion a month. Analysts had expected the central bank to increase purchases to around €75 billion a month.

This morning, the Footsie is estimated to shed some 43 points at the opening bell today, kicking off at 6,232. Today’s corporate calendar includes a release of easyJet’s (LON:EZJ) November traffic statistics and a trading update from property developer Berkeley Group (LON:BKG). Investors around the world will also be watching the latest US nonfarm payroll figures, due to be published at 13:30 GMT, as well as a meeting of oil producing group OPEC.

October’s US jobs numbers exploded beyond all expectations with a change of 271,000, leading to much speculation that the Federal Reserve had its green light for a rates rise at its December 15-16 meeting. “The consensus expectation is for (November) payrolls to come in around 200,000. Anything from 180,000 upwards will keep the (16 December) rate hike on the table”, SpreadCo’ analyst David Morrison said of the looming announcement. “But watch out for a bad number: if it comes in below 160,000 then all bets are off and the dollar should continue its ECB-triggered decline,” he added.

A meeting of the Organization of Petroleum-Exporting Countries (OPEC) is also in focus today. Oil prices rose three percent yesterday, buoyed by a weaker dollar and reports that Saudi Arabia could be ready to compromise on production levels with other non-OPEC producers. However, other sources have said there was little chance of a change of strategy from OPEC, which has maintained its output ceiling of 30 million barrels per day despite the decline in oil prices.


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