08:10 , Graeme Evans
The FTSE 100 index is 6.85 points lower at 8217.13, in line with the lacklustre start to the week for Asia markets.
Rolls-Royce shares fell 8.6p to 576.4p after Citigroup removed its Buy recommendation on the engines maker, switching to Neutral.
Next shares weakened 52p to 9470p ahead of tomorrow’s trading update, while Marks & Spencer lost 2p to 388.5p.
Banking and homebuilding stocks offered some support after NatWest shares rose 4.7p to 407.7p and Barclays lifted 2p to 268.45p. Barratt Redrow added 6.2p to 426.7p and Persimmon rose 11.5p to 1151p.
07:45 , Graeme Evans
China’s services sector today reported its fastest expansion since May.
The purchasing managers index reading for December came in slightly ahead of expectations at 52.2, up from 51.5 in November.
Sales growth was driven by higher domestic demand, boosting hopes for the world’s second largest economy at the start of 2025.
The Shanghai Composite was broadly unchanged today, having just posted its biggest weekly decline since February.
07:33 , Graeme Evans
The retail sector dominates this week’s UK corporate diary, with heavyweights Next, Tesco and Marks & Spencer scheduled to post festive updates.
Next reports tomorrow, having delivered a series of profit upgrades over 2024.
Marks & Spencer’s update on Thursday also comes on the back of a strong run for the resurgent retailer.
Tesco reports on the same day, alongside discounter B&M and the bakery chain Greggs. Sainsbury’s is scheduled to post an update on Friday.
07:23 , Graeme Evans
The major event of the week is likely to be Friday’s monthly US jobs report, given the potential for the figures to sway the US interest rate outlook in 2025.
Deutsche Bank economists are looking for the headline non-farm payrolls reading to grow by 150,000 in December.
That compares with the 227,000 print in November, a figure boosted by a bounce back from previous weather disruption and the end of strikes.
The bank adds that the six-month average is currently running at 143,000. It sees the unemployment rate ticking up by a tenth to 4.3%.
Europe’s main focus will be tomorrow’s flash CPI reading, particularly given the recent rise in natural gas prices and depreciation of the euro.
07:07 , Graeme Evans
Dollar strength caused by signs that US interest rates will stay high for longer in 2025 means the pound starts the new week at an eight-month low near $1.24.
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Sterling’s fall from $1.34 in September also follows a recent run of disappointing UK economic figures, including GDP’s stagnation in the third quarter.
Meanwhile, the FTSE 100 index is seen starting today’s session 14 points lower at 8210, having fallen 0.4% on Friday.
Wall Street ended a five-day losing streak after the S&P 500 index rose by 1.3%, the Nasdaq by 1.8% and the Dow Jones Industrial Average lifted 0.8%.
The Hang Seng index and Shanghai Composite are slightly lower this morning, despite PMI figures from China’s services sector beating expectations at a seven month high.