London-pre open: Mixed bag for Friday as consumer confidence plunges, NFP eyed

London's larger stocks are expected to endure a mixed morning on Friday, coming off the previous positive session but waking up to the sharpest drop in consumer confidence in more than two decades.

Many traders will also be looking stateside as the closely followed non-farm payroll release emerges in the US later in the day.

After its oil-assisted bounce on Thursday, the FTSE 100 is predicted to fall around 23 points, according to pre-market trading, while its mid-cap sister index is seen as surging 229 points.

This may result from the FTSE 250's greater focus on the UK, as a consumer confidence survey from market researcher Gfk in the wake of the Brexit vote has found British morale sliding at the fastest pace in 22 years, with shoppers worried about the economic outlook and inflation.

Gfk's headline index dropped eight points to -9, primarily driven by concerns about the economic situation over the next 12 months, which fell to -29 from -14, its lowest level since December 2012, as well as a 12-point decline in consumers’ intent to make major purchases over the next 12 months.
conducted 30 June to 5 July

Reflecting on these results, Barclays said it now expects households to materially slow their spending in this and coming years, forecasting a significant deceleration in private consumption growth to 2.0% in 2016 and to 0.1% in 2017, from 2.5% in 2015.

Later on Friday morning, UK trade data is due, with a £10.7bn deficit for May expected, of which only £2.8bn is non-EU.

Oil prices sank back overnight, which has impacted the mood among investors in Europe, said analyst Naeem Aslam at Think Forex, exacerbated by gloomy Japanese trade data.

But traders will be much focused on "the mother of all data- the US Non-Farm Payroll number", which is due at 1330 BST.

"Today’s trading will be dominated by one set of data, and one set only- the US non-farm payroll number. This figure is expected to come in at 172K and anything off this number could spark turmoil in the market," Aslam said.

"Last month's US payroll data changed the landscape for the markets and for the Fed. As a result, investors scaled back on their bullish dollar bets because they could not see the Fed increasing the interest rate anytime soon. The irony being that it was just one number on its own, not a confirmation of a trend or anything along those lines. This reality makes today's US NFP payroll number massively important."

Michael Hewson at CMC Markets added that the NFP report could also "answer the question as to whether the May report was an outlier or an indicator of a sharply changing trend in the US jobs market, and justify market expectations of no rate rise this year", with a decent payrolls report of anywhere near 200k liable to reignite expectations of a move on rates in September.

In UK company news, FTSE 100 group Hammerson and joint venture partner Allianz Real Estate have secured the ownership of Dundrum Town Centre in Ireland, a shopping and leisure destination as part of a portfolio of market-leading retail assets in Dublin, for €1.23bn (£1.01bn). The two partners acquired loans secured against a portfolio of retail assets in September 2015 from the National Asset Management Agency for €1.85bn (£1.53bn), a discount to the face value of the loans.

Aveva Group has announced the stepping down of chief executive Richard Longdon after three decades at the data and IT group, which also said it could benefit from a potentially sizeable currency gain for the full year due to weakness of sterling since the EU referendum. The FTSE 250 engineering data and IT provider, which said Longdon would be replaced by chief financial officer James Kidd at the end of 2016, added that trading had remained satisfactory in recent weeks.

Fellow mid-cap outfit IG announced that it has appointed Paul Mainwaring as chief financial officer designate. The online trading company said Mainwaring will start on Monday, replacing Mark Ward who will leave the company after a short handover, as previously announced.