London pre-open: Stocks to dip ahead of payrolls; oil lower

(Sharecast News) - London stocks were set to edge lower at the open on Thursday as investors eyed the latest US non-farm payrolls report, with oil prices down amid reports of progress in US-Iran peace talks.

The FTSE 100 was called to open around 10 points lower. At 0715 BST, Brent crude was down 1.1% at $70.76 a barrel and West Texas Intermediate was off 1.2% at $67.76 after a spokesperson for Qatar's Foreign Ministry said "positive progress" was made on issues related to the memorandum of understanding between the US and Iran.

This followed a separate meeting of Qatari and Pakistani mediators with the US and Iranian delegations in Doha.

"The parties agreed to continue discussions over the coming period, with the next meeting to be scheduled at the earliest possible time following the funeral processions of the former Iranian Supreme Leader," the official posted on X.

Looking ahead to the rest of the day, the latest non-farm payrolls report, unemployment rate and average earnings will be released at 1330 BST, a day early due to the Independence Day holiday in the US on Friday.

Kathleen Brooks, research director at XTB, said: "The market is expecting an approximately 113k increase in payrolls, which is a step down from the 172k print for May, the unemployment rate is expected to remain stable at 4.3%, and average hourly earnings could pick up a notch to 3.5% from 3.4% YoY.

"The strong reading for May makes the June report a test: can the upside momentum be maintained, or was the May figure an anomaly? Federal government jobs jumped last month, but this is expected to be one-off. If we get a reading that is close to consensus, then it would suggest modest growth in US jobs numbers are continuing. This would point to a resilient labour market that is not falling off a cliff."

Brooks said a downside surprise of 70k or lower could see the US Treasury curve steepen, as 2-year Treasury yields fall, and long-end bond yields rise. "We think a weaker number could also lead to a recalibration of US interest rate expectations, and we think the Fed would be unlikely to hike rates in July if the labour market is showing signs of softening, especially if the unemployment rate also rises," she added.

In UK corporate news, electricals retailer Currys posted a jump in full-year earnings despite headwinds in the UK.

Group revenues in the year to 2 May rose 6% to �9.2bn, or by 4% on a like-for-like basis, while adjusted pre-tax profits jumped 18% at �191m. Underlying sales in the UK and Ireland were 3% stronger - despite a "subdued" consumer backdrop - and 6% in the Nordics.

The FTSE 250 company also flagged a "solid" start to the current year, putting it on track to meet market expectations.

Safety equipment maker Halma said it had made two acquisitions for a total of �54m.

The firm bought Netherlands-based itemedical for �23m (�20m) and Sweden's Naslund Medical for $45m (�34m) both on a cash and debt free basis.

Property development and investment company Great Portland Estates said it had made a strong start to the leasing year, signing 21 new leases and renewals in the first quarter and securing �13.2m of annual rent.

Great Portland said the deals included 15 fully managed leases generating �9.9m at �245 per sq ft, two fitted leases adding �1.6m and two ready to fit leases contributing �800,000.