(Alliance News) -Â Stocks in London are set to start the week on a bright note, after the strong US jobs data out late last week and the Senate approval over the weekend of a USD1.9 trillion fiscal stimulus package.
IG says futures indicate the FTSE 100 index of large-caps to open 57.98 points, or 0.9%, higher at 6,688.50 on Monday. The FTSE 100 closed down 20.36 points, or 0.3, at 6,630.52 on Friday.
"The bright finish in US equities on Friday may set the broader tone today. Despite the debate on inflation, tactically, everyone should feel reassured if higher yields are driven by growth expectations improving rather than market-based inflation repricing," said Stephen Innes at Axi.
"With interest volatility as the centre of everyone's concern, thankfully, the beat on US payrolls provided welcome relief for equities and points to an inflexion in the labour market," said Innes. "The stronger-than-expected print demonstrates once again that the economy is poised to accelerate as the risk from Covid recedes."
Figures on Friday showed US hiring picked up sharply in February as Covid-19 cases fell and vaccines fuelled hopes for more growth ahead. The US economy added 379,000 jobs in February, following an upwardly revised 166,000 rise in January. The latest figure was more than double market expectations, cited by FXStreet, of 182,000 jobs.
Adding to hopes for economic recovery, the US Senate on Saturday voted to approve a USD1.9 trillion relief package.
Passed by 50 votes to 49 in a strict party-line vote, the sweeping legislation now heads back to the Democratic-majority House of Representatives, where it is expected to be adopted, barring a last-minute setback.
"I promised the American people help was on the way," said President Joe Biden in an address from the White House.
Even without the progressive priority of a minimum wage increase to USD15 an hour, the stimulus bill marks a victory for Biden's Democrats as they put their stamp on the recovery from a pandemic that has killed more than 500,000 people in the US and hobbled its economy. The legislation would send out USD1,400 stimulus checks to most Americans and allocates USD350 billion to state and local governments and USD130 billion to schools.
In the US on Friday, Wall Street ended in the green, with the Dow Jones Industrial Average ending up 1.9%, the S&P 500 up 2.0% and the Nasdaq Composite up 1.6%.
Sterling was quoted at USD1.3824 early Monday, firming on USD1.3813 at the London equities close on Friday.
The euro traded at USD1.1903 early Monday, soft versus USD1.1912 late Friday. Against the yen, the dollar rose to JPY108.42 versus JPY108.21.
In Asia on Monday, the Japanese Nikkei 225 index ended down 0.4%. In China, the Shanghai Composite was down 2.1%, while the Hang Seng index in Hong Kong was down 1.4%. Â
Gold was quoted at USD1,706.45 an ounce early Monday, higher than USD1,697.43 on Friday.
London's oil sector may get a boost at the start of the week as Brent prices topped USD70 a barrel for the first time since the start of 2020.
Brent oil was trading at USD70.73 a barrel early Monday, jumping from USD68.74 late Friday after a missile and drone attack targeted the heart of Saudi Arabia's oil industry on Sunday in an assault claimed by Yemen's Huthi rebels. Brent prices hit an overnight high of USD71.38.
The attack on energy giant Saudi Arabian Oil Co's facilities came as the Saudi-led military coalition bombed Yemen's Huthi-controlled capital Sanaa after intercepting a separate flurry of cross-border Huthi drones and missiles.
Monday's economic calendar has German industrial production figures at 0700 GMT and Bank of England Governor Andrew Bailey speaks on the UK's economic outlook at 1000 GMT.
Monday's corporate calendar has annual results from education publisher Pearson and retailer Shoe Zone.
By Lucy Heming;Â lucyheming@alliancenews.com
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