US pre-open: Stocks seen higher as investors eye BoE rate cut

US futures pointed to a firmer open on Wall Street as investors bet the Bank of England would cut interest rates on Thursday for the first time since 2009.

At 1045 BST, Dow Jones Industrial Average, S&P 500 and Nasdaq futures were all up 0.7%.

“US stocks look set for a higher open with a triple digit gain in the Dow Jones Industrial Average to take it well into new record territory. Every extra day the major averages can hold above last year’s highs, the more traders will start to believe that the breakout is sustainable,” said Jasper Lawler, market analyst at CMC Markets.

Consensus expectations are for the Bank of England to cut rates by 25 basis points to 0.25% in the wake of the UK's vote to leave the European Union, although some market participants reckoned the central bank might hold off for now.

Societe Generale said there is no obvious reason for the MPC to delay after Governor Carney said at the end of June that some monetary policy easing will likely be required over the summer.

“Mr Carney made it very clear in his 30 June speech that easing will start imminently. Now he has said that, what is the point in waiting? So we expect a cut to 25bp at today’s meeting. However, given his caution about the impact on bank profitability of low rates, we also expect the MPC to set this rate as the new floor. As more easing is certain to be needed, we also expect a reopening of the QE programme at a pace of £25bn per quarter.”

In corporate news, Google shares were little changed in pre-market trade, with European officials expected to announce a new round of antitrust charges against the company.

JPMorgan Chase was due to report earnings before the opening bell, along with BlackRock and Delta Airlines.

On the data front, investors will eye the release of US initial jobless claims at 1330 BST. SocGen said claims were likely to have remained near their lowest level in decades, underscoring the resilience of the US labour market.

Oil prices advanced on a weaker dollar and following Wednesday’s drop. West Texas Intermediate was up 1.1% to $45.23 a barrel and Brent crude was 1% firmer at $46.73.

Investors will also be watching out for speeches by Federal Reserve officials later on Thursday. St Louis Fed President James Bullard will make welcome remarks at the Official Monetary and Financial Institutions Forum, while Atlanta Fed President Dennis Lockhart is due to speak at the Global Interdependence Center’s Rocky Mountain Economic Summit.