US pre-open: Stocks set for muted open

US futures pointed to a muted open on Wall Street as investors continued to keep an eye on Deutsche Bank and the broader financial sector.

At 1100 BST, Dow Jones Industrial Average futures were up 0.1%, while S&P 500 and Nasdaq futures were flat.

Paul Webb, deputy chief executive officer ADS Securities London, said: “We’re currently eyeing a relatively quiet start to the new trading month on Wall Street with major indices suggesting that only modest gains will be realised at the open. We haven’t got much in the way of economic data due for release between now and the opening bell either, so this is likely to mean that fresh direction is going to be thin on the ground, too.

“We do have a couple of events lurking however that could still serve to rock sentiment in the near term – oil prices are still trending higher in the wake of last week’s OPEC agreement to trim output, which is in turn broadly supporting equities. In addition, we’ve also got the lingering Deutsche Bank saga and although we seem to be stepping back from the brink here, any further deterioration of the outlook for the bank could serve to once again rattle equity markets globally.”

In the UK, the pound was under the cosh versus the dollar and the euro after Theresa May vowed over the weekend to trigger Article 50 by the end of March. Still, the currency got a brief boost after the release of stronger-than-expected manufacturing data, which showed activity in the sector unexpectedly improved in September, hitting its highest level since June 2014.

The Markit/CIPS manufacturing purchasing managers’ index rose to 55.4 from 53.4 the month before, beating expectations for a reading of 52.1.

Oil prices reversed earlier losses to trade higher as investors continued to mull over last week’s agreement by the Organisation of Petroleum Exporting Countries. West Texas Intermediate was up 1% at $48.74 a barrel and Brent crude was 1.1% stronger at $50.75.

Deutsche Bank was likely to remain in focus after US-listed shares in the lender surged on Friday following a report that it may be able to negotiate a lower settlement with the US Justice Department over its mis-selling of mortgage-backed securities.

On Monday, the Wall Street Journal reported that talks between the two were moving forward, but no deal has yet been presented to senior decision makers on either side. Deutsche Bank shares were not trading in Germany on Monday as markets there were closed for a public holiday.

Elsewhere, electric car maker Tesla Motors was on the front foot after it posted its best quarter of sales ever for the third quarter.

Allergan was likely to be in focus after AstraZeneca said it has signed a deal with the company that will give it the global rights to a Crohn’s disease antibody.

Janus Capital Group was also in the spotlight as it announced an all-share merger with London-listed Henderson Group, which would give the investment management firms a combined market cap of $6bn.

On the data calendar, US construction spending and ISM manufacturing are at 1500 BST.