LONDON (Alliance News) - The FTSE 100 is set to open higher Monday, despite weak economic data from China, as Greece edges closer to concluding its third debt bailout deal.
IG says futures indicate the FTSE 100 to open higher at 6,755.2. The index closed down 0.4% at 6,718.49 on Friday, after a strong US jobs report saw investors pricing in a September rate hike by the US Federal Reserve.
Job growth in the US slowed for the second consecutive month in July, according to the Labor Department, although its report still showed a notable increase in employment. It said non-farm payroll employment rose by 215,000 jobs in July following an upwardly revised increase of 231,000 jobs in June and a jump of 260,000 jobs in May. The consensus, according to FXStreet.com, predicted jobs to rise by 222,000, compared to the original 223,000 growth seen in June.
On Wall Street Friday, the DJIA, the S&P 500 and the Nasdaq Composite all ended down 0.3%.
In Asia Monday, the Japanese Nikkei closed up 0.4%, the Hang Seng trades down 0.1% and the Shanghai Composite is up 4.6%.
Chinese exports declined sharply at a faster-than-expected pace in July, figures from the General Administration of Customs showed on Saturday. Exports decreased 8.3% year-on-year in July, reversing the 2.8% increase in the previous month. Economists had expected exports to decline 1.5%. At the same time, imports were down 8.1% in July, which was forecast to fall 8%. The trade surplus totalled USD43.03 billion, below the expected surplus of USD54.7 billion.
China's consumer prices increased at a faster rate for the second straight month in July, with the growth exceeding the consensus estimate, figures from the National Bureau of Statistics showed on Sunday. Consumer prices increased 1.6% year-on-year in July following the 1.4% rise in June. In May, prices had risen 1.2%. Economists had expected a 1.5% growth for the month.
However, producer prices fell at a steeper than expected pace and declined by the most in six years. In a separate report released by the agency, producer prices contracted further by 5.4% annually in July, following a 4.8% drop in the previous month.
Meanwhile, Greece's creditors agreed amongst themselves a draft bailout memorandum that they now hope to finalise with Athens in the coming days, sources said on Saturday, amid growing pressure on the two sides to strike a deal. Athens has been negotiating the new EUR86 billion bailout - its third in five years - with the European Commission, the European Central Bank and the International Monetary Fund for two weeks. The two sides are under pressure to strike a deal and give Greece access to bailout funds by August 20, when it is supposed to make a EUR3.2 billion debt repayment to the ECB.
"The goal of the [creditor] institutions is to agree a memorandum of understanding with the Greeks by Tuesday," a eurozone source said on condition of anonymity.
On the corporate front in London, FTSE 100 aerospace and engineering group Meggitt said it has struck a USD200 million deal to acquire the advanced composites unit of FTSE 250 aerospace and defence manufacturer Cobham.
Meggitt will pay USD200 million in cash to acquire the division, which makes a range of engineering aerospace components and secondary structures. It will be integrated into Meggitt's Polymers & Composites division. The deal will be backed by a USD300 million credit facility, Meggitt said.
FTSE 100 financial services company Hargreaves Lansdown said it has hired Chris Hill as its new chief financial officer. Hill is expected to take up the role in March 2016, until which time Simon Cleveland will continue to act as interim chief financial officer. Hill joins from IG Group Holdings, the FTSE 250 financial derivatives trading provider, where he has been chief financial officer for the last four years.
Construction and support services company Carillion said it has been selected for all three lots of the UK government's Facilities Management Services agreement. The FTSE 250-listed company has been named as a supplier on the Total Facilities Management, Hard Facilities Management, and Soft Facilities Management lots of the agreement. The total scheme is expected to see the government spend between GBP1.3 billion and GBP4.1 billion on outsourced facilities management contracts which will run until the end of July 2019.
In an equally quiet economic calendar, there is the Sentix investor confidence survey for the eurozone at 0930 BST, and US labour market conditions index at 1500 BST.
By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1
Copyright 2015 Alliance News Limited. All Rights Reserved.
