US pre-open: Stocks seen flat as attention turns to BoE

US futures pointed to a fairly steady open on Wall Street, where investors were likely to be keeping an eye on developments in the UK as the Bank of England was set to announce its latest policy decision.

Chris Beauchamp, senior market analyst at IG, said: “US markets find themselves in the gap between ADP numbers yesterday and non-farm payroll figures tomorrow, so doubtless Wall Street will take much of its cue from what the Bank of England says or does.

“With an Inflation Report to deliver as well, we are set for a busy afternoon, even without more earnings updates from US firms.”

At 1105 BST, Dow Jones Industrial Average and S&P 500 futures were flat, while Nasdaq futures were down 0.1%.

At the same time, oil prices retreated. West Texas Intermediate was down 0.4% at $40.66 a barrel and Brent crude was off 0.9% at $42.72.

The Bank of England is widely expected to announce its first rate cut since 2009, with markets pricing in a move to a record low of 0.25%.

Oanda’s Craig Erlam said: “It seems the market is pricing in a rate cut and possibly some further quantitative easing, which while being the obvious response, may not be the most effective. The BoE may instead opt for something a little more unconventional, something along the lines of the Funding for Lending Scheme for example, which may get an adverse reaction in the markets.

“We’ve seen a couple of examples of this in the eurozone and Japan this year and I wouldn’t be surprised to see it again today. Of course, the BoE may come out swinging and cut rates, boost QE and do something more unconventional, effectively ticking every box, but I think this is less likely. Once again I do fear that the markets have got ahead of themselves and the BoE may be unable or unwilling to do so much.”

In corporate news, Tesla Motors was weaker in pre-market trade after it posted a bigger-than-expected loss for the second quarter late on Wednesday.

Square Inc surged, however, after its second-quarter revenue beat estimates and the company lifted its revenue guidance for the year.

Transocean was also in the black after stronger-than-expected second-quarter profit, but TripAdvisor slid after missing targets as its revenue declined.

Restaurant Brands, Priceline, Kellogg and Viacom were among the companies slated to report on Thursday.

On the macroeconomic front, US initial jobless claims are at 1330 BST, followed by durable goods orders and industrial new orders at 1500 BST. The main focus this week, however, will be on Friday’s all-important non-farm payrolls report.