US pre-open: Stocks seen flat ahead of busy week

US futures pointed to a broadly flat open on Wall Street ahead of a week that will see a number of key earnings releases and a rate decision by the Federal Reserve.

At 1055 BST, Dow Jones Industrial Average futures were up 0.2%, while S&P 500 and Nasdaq futures were unchanged.

At the same time, oil prices were in the red. West Texas Intermediate was down 0.7% at $43.88 a barrel while Brent crude was also 0.7% lower, at $45.37.

Over the weekend, finance chiefs at the G20 summit in China said the UK’s decision to leave the European Union has heightened risks for the global economy and called on the UK to remain a close partner of the EU. However, the G20 said it has the tools requited to deal with the potential fallout from Brexit.

The main focus in the US this week will be the Fed’s rate announcement on Wednesday, with market participants expecting the bank to keep rates on hold.

Ranko Berich, head of market analysis at Monex Europe, said: “The latest US data contains plenty of evidence to help the hawks on the FOMC make their case. Price and labour market data indicate a tightening labour market and rising wages, and, after the dip seen in May, June’s jobs report showed job creation and wage growth once again beginning to pick up.

“The Fed may well choose to sit tight and wait for more data, but considering the strong data we’ve seen recently, markets could hardly be less prepared for a hike this week. Federal funds futures are priced for an approximately 8% chance of an increase, after the FOMC has repeatedly found new excuses to avoid raising rates at each successive meeting.”

Investors will also be eyeing a rate announcement from the Bank of Japan on Friday. Deutsche Bank’s economists expect a cut in the interest rate on the BoJ's policy-rate balance from -10 basis points to -20bps and an increase in its purchasing of ETFs and Japanese real estate investment trusts to an annual rate of Y6tn and Y180bn, respectively. They see little chance of an increase in the Japanese government bond purchasing pace, however.

In corporate news, earnings were due from Kimberly Clark and Sprint ahead of the opening bell. Gilead Sciences and Express Scripts Holdings were also slated to reported earnings.

Elsewhere, Yahoo! Inc was on the front foot in pre-market trade amid reports Verizon Communications has agreed to buy the company for $4.8bn.