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London open: Stocks edge higher ahead of US jobs report
Shares started the holiday-shortened week slightly higher following gains overnight on Wall Street, with investors apparently treading cautiously ahead of the all-important monthly US non-farm payrolls report due out at the end of the week.
As of 0828 BST London’s FTSE 100 was trading six points higher at 6,844.55.
Oanda’s Craig Erlam said: “Tuesday is likely to be one of the quieter days in an otherwise busy and important week for the markets, with investors having one eye on Friday’s US jobs report following Janet Yellen’s hawkish comments at Jackson Hole on Friday.”
“Not only did Yellen give an upbeat assessment of the US economy on Friday, this was backed up by comments from her vice Chair Stanley Fischer who claimed that Yellen’s comments were consistent with as many as two rate hikes this year.”
“We’ve had this hawkish commentary from officials on numerous occasions in the past but with a consensus appearing to build and policy makers repeatedly hinting that at least one hike this year is likely, markets need to take notice. Still, investors are not totally convinced which makes Friday’s jobs report extremely important.”
On the data front, UK money supply and mortgage approvals are at 0930 BST. In the US, consumer confidence is at 1500 BST.
The economic calendar in the euro area was expected to be more heavily loaded, with consumer price data from Germany´s main regions referencing the month of August due to be released.
In corporate news, a review conducted by a panel of experts concluded that the Samarco dam disaster at a mine part-owned by BHP Billiton in Brazil last year that killed 19 people was caused by construction and design flaws.
The report, commissioned by BHP, said problems at the dam made it more unstable, causing “liquefaction” in the dam wall, the Daily Telegraph reported.
BHP Billiton, and its partner Vale, have set aside up to $1.3bn (£1bn) to cover costs arising from the fatal accident that occurred at an iron ore mine in Brazil last year.
Distribution and outsourcing group Bunzl reported a rise in first-half profit as revenue grew and the company lifted its interim dividend.
For the six months to the end of June, pre-tax profit increased to £155.6m from £147.1m on revenue of £3.45bn, up from £3.14bn.
Chief executive Frank van Zanten said: “We continue to have a strong balance sheet and an active pipeline of opportunities for further acquisitions and expect to complete more transactions during the rest of the year. The board is confident that Bunzl’s well positioned businesses will develop further and that the prospects for the group are positive.”
