London pre-open: Stocks to rise ahead of payrolls report

(Sharecast News) - London stocks were set to rise at the open on Thursday as investors eyed the latest US non-farm payrolls report.

The FTSE 100 was called to open around 25 points higher, having fallen 10 points on Wednesday amid concerns about the future of chancellor Rachel Reeves.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said long-term bond yields across Western markets are flashing early signs of stress.

"The latest catalyst was a moment of uncertainty in the UK, where Keir Starmer hesitated to confirm whether Chancellor Rachel Reeves would remain in her post - while Reeves was seen wiping away tears behind him in Parliament (it's reportedly for personal reasons)," she said.

"But the imagery alone raised alarms about the UK's narrowing fiscal headroom, the need to raise taxes and cut spending, and the credibility of the gilt market. As a result, the 10-year gilt yield surged 25 basis points, pushing the US 10-year yield to 4.30%. Japanese long-term yields also reversed recent declines."

Looking ahead to the rest of the day, all eyes will be on the non-farm payrolls report, unemployment rate and average earnings for June.

Stephen Innes, managing partner at SPI Asset Management, said: "Economists are pencilling in 110,000 jobs for June - the softest in four months - alongside a mild uptick in the unemployment rate to 4.3%. Wednesday's ADP already cracked the surface, showing the first drop in private payrolls in over two years. And while Powell keeps insisting the labour market remains 'solid', the Fed's been hiding behind that strength to justify its inaction.

"But if that support starts to wobble - if NFP underwhelms again - the market won't wait. Rate-cut odds will surge, and equity bulls will treat it like a starter pistol. The Fed may be trying to hold the line, but one weak print could be enough to tip them - and send stocks into another FOMO-fuelled dash higher.

"In that light, following the soft ADP print, traders have already positioned themselves all in for at least two rate cuts this year, so the street is anticipating a weak NFP. Hence, at this point, even a modest miss versus the +110,000 consensus is likely to be shrugged off as already in the price."

In UK corporate news, luxury brands seller Watches of Switzerland reported a fall in annual profits but posted record revenue as the UK returned to growth driven by domestic buyers.

Pre-tax profit for the year to 27 April fell 18% to �76m, while revenue grew 7% to �1.65bn. WoS said it was still too early to comment on the potential impact of any US tariff changes.

Property developer Great Portland Estates said that "strong leasing momentum" experienced in FY25 had continued in Q126, with the group signing �20.6m of new leasing deals, 6.7% ahead of enterprise rental value.

GPE said it was now "in an enviable position" to deliver "premium, sustainable spaces" into a market "starved of supply".