(Alliance News) - London's FTSE 100 is called to open a touch lower on Monday, while equities in Asia made a slow start to the week, as investors eagerly await Friday's key US employment data.

IG says futures indicate the FTSE 100 to open 7.2 points lower, 0.1%, at 7,522.15 on Monday. The index of London large-caps closed up 75.60 points, 1.0%, at 7,529.35 on Friday, adding 0.6% over the course of last week.

The pound was quoted at USD1.2679 early Monday, up from USD1.2659 late Friday afternoon. The euro stood at USD1.0871, rising from USD1.0859. Against the yen, the dollar was trading at JPY146.74, down from JPY147.37.

In Asia on Monday, Tokyo's Nikkei 225 fell 0.7%. The Shanghai Composite in China was 0.1% lower in late trade, while the Hang Seng in Hong Kong was down 0.4%. The S&P/ASX 200 in Sydney, however, surged 0.7%.

"A slow Monday start as traders prepare for a slew of actionable US economic data scheduled for release this week, poised to be crucial in refining traders' expectations regarding Federal Reserve policy. The insights garnered from this data may prove pivotal for the upcoming refresh of the dot plot later in the month," SPI Asset Management analyst Stephen Innes commented.

Friday US nonfarm payrolls is reported at 1330 GMT. An interest rate decision from the Federal Reserve comes in the following week.

"With Fed officials preparing for next week's FOMC meeting, the data docket will do all of the talking – most importantly, Friday's employment report for November. Our headline (+130,000 forecast versus 150,000 previously) and private (130,000 versus 99,000) payroll forecasts reflect a roughly 30,000 boost from returning auto workers, which should keep the unemployment rate unchanged at 3.9% – though the risk is that it rounds down a tenth to 3.8%," analysts at Deutsche Bank commented.

Deutsche believes that tepid US data could open the door for a Fed cut as soon as the first-quarter of 2024.

"We maintained our view for the first rate cut in June and 175 basis points of total cuts next year – a view that has been more aggressive than consensus and market pricing. We have also recently detailed conditions for earlier cuts. In our view, if the labour market continues to soften, with the unemployment rate rising above 4% on weak payrolls, and growth showed a similar weak trend, there would be uncertainty about whether a soft landing was assured. If, in turn, these developments were coupled with better-than-expected inflation data (0.2% monthly core personal consumption expenditure prints), this could open the door for rate cuts as early as Q1 of next year. Indeed, market pricing for the March 2024 FOMC meeting implies just such an outcome," analysts at the German bank added.

In the US on Friday, Wall Street ended higher, with the Dow Jones Industrial Average adding 0.8%, while the S&P 500 and the Nasdaq Composite each rose 0.6%.

Brent Crude traded at USD78.21 a barrel early Monday, down from USD78.99 late Friday.

Gold continued to rally, breaching the USD2,120 mark to hit a new record high.

The price of gold rose to USD2,086.44 an ounce early Monday in London, from USD2,070.40 at the time of the European equities close on Friday. It traded as high as USD2,120.83 an ounce earlier on Monday.

Monday's economic calendar has German trade data at 0700 GMT.

The local corporate calendar has half-year results from SDCL Energy Efficiency Income Trust.

By Eric Cunha, Alliance News news editor

Comments and questions to newsroom@alliancenews.com

Copyright 2023 Alliance News Ltd. All Rights Reserved.