In what looks to be an exceptionally quiet Friday for company news, it will be up to the monthly US jobs update to provide excitement.
The US labour market has so far proved resilient in the face of the rate-rising spree by the Federal Reserve, which has seen borrowing costs hit a 22-year high.
The most recent weekly jobless claims figures, a proxy for lay-offs, showed a fall of 10,000 to 230,000 in the week ended 19 August, which was “consistent with relatively tight labour market conditions”, according to Nancy Vanden Houten at Oxford Economics.
But payrolls tomorrow could start to show a slowdown in the jobs market.
Andrew Hunter, deputy chief US economist at Capital Economics, predicts a 170,000 increase in non-farm payrolls in August.
“The increases in employment of 185,000 and 187,000 over the previous two months have been the weakest gains since December 2020. If the recent pattern of monthly revisions continues – which has seen the initial estimate revised down by an average of 40,000 so far this year – the slowdown in employment growth may already be even sharper," Hunter said.
The Capital Economics economist added that this scenario may give the US Federal Reserve "a little more confidence" that labour market conditions are continuing to move into "better balance".
That might give the market a bounce as the prospect of extended interest rate hikes by the Fed recedes.
Announcements expected
Economic announcements: PMI Manufacturing (UK), Non-Farm Payrolls (US), Unemployment Rate (US), PMI Manufacturing (US), Construction Spending (US), ISM Manufacturing (US), Auto Sales (US)