US pre-open: Stocks seen flat ahead of payrolls report

US futures pointed to a broadly flat open on Wall Street as investors awaited the release of the all-important non-farm payrolls report for further clues on the timing of the next rate hike.

At 1125 BST, Dow Jones Industrial Average futures were up just 0.1%, while S&P 500 and Nasdaq futures were unchanged.

At the same time, oil prices held steady after Thursday’s meeting of the Organisation of the Petroleum Exporting Countries in Vienna failed to yield an agreement on an oil production ceiling. West Texas Intermediate was unchanged at $49.18 a barrel and Brent crude was 0.1% higher at $50.10

“It’s jobs day in the US and with the June Fed meeting just around the corner, today’s report could play a big role in the vote in a couple of weeks’ time,” said Craig Erlam, senior market analyst at Oanda.

“There is clearly a desire within the Fed to raise interest rates again over the summer, given how hawkish the commentary has been in recent months but they have repeatedly stressed that the data must perform in line with expectations. The economic data has improved considerably recently, from retail sales and personal spending figures to the inflation data, but I think policy makers would like to see at least one more strong jobs report before they take the plunge.

“A weaker jobs report would also provide a domestic argument for holding off in June, with the UK referendum on EU membership a week later making the decision that much tougher. Even with strong jobs data, I think some policy makers will opt to wait until July and be confident that one potential risk – a Brexit – has been removed, rather than have to possibly backtrack at a later date.”

Consensus forecasts are for the report to show that 164,000 jobs were added in May.

Investors will also eye the release of US Markit services PMI at 1445 BST and ISM non-manufacturing and durable goods orders at 1500 BST.

Aside from data, market participants will also be watching out for a speech on the economic outlook by Fed Governor Lael Brainard at 1730 BST.

In corporate news, shares in retailer GAP were 5% higher in pre-market trade despite the company saying late on Thursday that sales in May fell 5%, while same-store sales dropped 6%.

Retailer Five Below was also in the black after it posted a big jump in first-quarter sales and earnings late on Thursday.