US pre-open: Futures point to lower open ahead of slate of data

Stocks futures were pointing to a weaker start to trading on Wall Street, with a softer than expected reading on private sector payrolls doing little to help matters.

Payrolls in the US rose by 158,000 last month (consensus: 185,000), according to payrolls consultancy ADP, following a downwardly-revised increase of 230,000 for May.

As of 1302 BST, Dow Jones mini futures were down by 88.00 points to 21,334.00, alongside a 11.25 point decline in the S&P 500 mini to 2,416,75 while the Nasdaq 100 mini was shedding 48.75 points to 5,602.75.

In the background, investors were still digesting the minutes of the Federal Open Market Committee's 13-14 June policy meeting.

For analysts at HSBC and Barclays, the FOMC was still on track to announce the start of tapering its programme of quantitative easing in September.

However, not all observers were convinced.

"The dollar is trading a little lower on the day as the US open approaches. The minutes from the last FOMC meeting did little to support the greenback, with the lack of inflationary pressures appearing to be taking its toll on the appetite for more rate hikes, among some policy makers. That suggests to me that, while one more rate hike may come this year – perhaps in December – the pace beyond then may slow, with the focus then turning to the balance sheet. Of course, should inflation move towards 2%, as remains the assumption of the committee, the pace of tightening may increase with it," said Craig Erlam, senior market analyst at Oanda.

In the background, front month West Texas Intermediate crude oil futures were higher by 1.44% to $45.79 a barrel on the NYMEX.

That followed data from the American Petroleum Institute which revealed a 5.8m barrel drop in US crude stockpiles, analysts had been expecting them to shrink by 2.8m barrels.

Investors were still waiting on initial weekly unemployment claims data at 1330 BST, which would be followed by the ISM services sector gauge at 1500 BST and weekly official crude oil inventory data a half hour later.

Foreign trade data for May were also set for release at 1330 BST.

All of the above, naturally, ahead of Friday's all-important monthly US jobs report.

Shares in consumer-facing wholesaler Costco gained before the opening bell after it reported a 7% jump in its sales for June to $12.17bn. For the five weeks to 2 June its like-for-like sales were 6% ahead.

Analysts at RBC resumed coverage of Exxon Mobil shares at 'sector perform' and of Chevron's at 'underperform'.