London pre-open: Quiet start ahead of 'noisy' day

3rd Jul 2014 07:40

Investors are holding their breath ahead of today's torrent of economic data and events as they await firm direction following yesterday's quieter session. City sources predict the FTSE 100 will open around five points higher than yesterday's close of 6,816.37.The main release today is the monthly US non-farm payrolls report, which may have a significant impact on investors' interest rate expectations. Also on the cards are the latest ISM services sector figures, weekly jobless claims data and international trade numbers. Here in the UK, the most recent service sector purchasing managers' index is due out, which is particularly important as the sector is the largest component of UK gross domestic product (GDP). As noted by Jameel Ahmad, Chief Market Analyst at FXTM, "only last week, Bank of England Governor Carney stated that a potential interest rate hike would be economic data driven, while hinting that a UK unemployment rate below 6% might influence the decision".In addition to this raft of data, the European Central Bank (ECB) will hold its monetary policy meeting, marking another important event for markets today.CMC Markets' Michael Hewson said: "With the US off on Friday for the Independence Day holiday we have a host of event risk to navigate around today [...] Any volatility is likely to come from either the US employment report or the ECB press conference, with the rest of the data likely to be 'market noise'. "That doesn't mean that the data is unimportant, far from it, but from a policy point of view it's not likely to have a lasting effect." As for this morning's company news, RSA Insurance announced it has agreed to offload the Chinese arm of its Sun Alliance subsidiary for £71m cash to Swiss Re as it looks to streamline the business. RSA Chief Executive Stephen Hester said the board was evaluating further non-core disposals, some of which the company expects to sign off before the end of the year. Building products distributor SIG has acquired Inatherm BV, a specialist distributor of air handling products based in the Netherlands, for an initial €4.7m and a deferred €0.7m due in January 2016. In 2013 the group generated profit before tax of €0.6m and had gross assets of €1.8m at the year-end. Government outsourcing group Serco said that while difficulties continue on some contracts, overall its trading and financial position has been in line with expectations since its last update two years ago. The group, which in April announced the resignation of its long-standing Chief Financial Officer Andrew Jenner and an emergency fundraising to bolster its balance sheet, said it is rebuilding trust and confidence with the UK government and its Strategy Review is proceeding according to plan.Upmarket chocolate maker Thorntons announced sweeter revenues in its business selling to supermarkets and other retailers in the fourth quarter, paving the way for annual profits in line with expectations. Infrastructure group Balfour Beatty has maintained its profit guidance for the full year despite a "further worsening" in the trading performance of its mechanical and electrical engineering activities in the first half. Engineering Services, which accounts around 10% of the UK construction business, is now being reviewed after the company identified a "further £35m profit shortfall", relating to issues with design changes, project delays, rework on projects and contractual disputes. NR