LONDON (Alliance News) - UK stocks are set to open a touch lower Friday as investors continue to digest European Central Bank President Mario Draghi's comments at the ECB's monetary policy press conference Thursday and await the US non-farm payrolls report due in the afternoon.
Draghi on Thursday said the ECB will start purchasing public sector bonds in the secondary market this coming Monday, March 9, under its USD1.1 trillion quantitative easing scheme announced in January. He reiterated that monthly purchases under the QE plan will be EUR60 billion and they will be carried out until the end of September 2016 "and will, in any case, be conducted until we see a sustained adjustment in the path of inflation which is consistent with our aim of achieving inflation rates below, but close to, 2% over the medium term."
Draghi added that the ECB will purchase bonds with negative yields up to the deposit rate of -0.2%.
He also said inflation in the eurozone is likely to fall to zero in 2015, lower than the 0.7% projected previously. It is expected to pick up to 1.5% in 2016 and to 1.8% in 2017. Economic growth forecasts for this year were raised to 1.5% from the 1.0% seen in December. The growth projection for next year was boosted to 1.9% from 1.5%.
The euro rose to a two-day high against the dollar as Draghi began his prepared comments, before falling to a fresh 11-year low at USD1.1005 as he answered questions from journalists. Ahead of the open on Friday the euro remains weak against the dollar, trading at USD1.1016.
IG futures indicate the FTSE 100 to open 5.8 points lower at 6,955.3. The index closed up 0.6% at 6,961.14 Thursday, a new record closing high for the index.
Wall Street also closed higher Thursday, with the DJIA ending up 0.2%, the S&P 500 closed up 0.1%, and the Nasdaq Composite ended up 0.3%.
In Asia Friday, the Japanese Nikkei closed up 1.2%, while the Hang Seng and the Shanghai Composite both trade down 0.2%.
German industrial production in January rose by more than expected, according to figures released early Friday. The seasonally adjusted figure rose by 0.6%, outstripping the expectation of a 0.5% growth. December's production growth was revised up to 1.0% from 0.1%.
AstraZeneca guided that it expects its total revenue to decline by a mid-single digit percentage at constant exchange rates in 2015, in line with previous sales revenue guidance it gave at the time of its full-year results, as it announced changes to the way it presents its revenue. The pharmaceutical giant has maintained its core earnings per share guidance.
Thomas Cook Group said it has struck a strategic deal with Chinese investment group Fosun International Ltd under which the latter will acquire a 5% stake in the travel operator. Thomas Cook said Fosun will pay GBP91.8 million to acquire 73.1 million shares Thomas Cook will issue to it, giving Fosun a 5% stake in the company. The shares are valued at 125.58 pence, compared to the travel firm's closing price Thursday of 120.60p.
Fosun then intends to acquire further Thomas Cook shares via open market purchases, with plans to increase its shareholding in the company to around 10% of its enlarged share capital.
In the economic calendar Friday, the focus will be on US nonfarm payrolls, unemployment rate and earnings data at 1330 GMT. Before that is UK consumer inflation expectations at 0930 GMT and eurozone fourth quarter GDP at 1000 GMT.
By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1
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Astrazeneca (AZN)