London's blue-chip index, the FTSE 100, is expected to open 7 points lower on Friday, settling around 10,860. This follows a 20-point decline in the previous session, bringing Thursday's close to 10,867. The market's cautious mood is influenced by ongoing developments regarding the Strait of Hormuz and anticipation of July's US payrolls data.
Deutsche Bank's Jim Reid noted that markets are showing increased nervousness towards the end of the week. This sentiment is largely attributed to preliminary details of a finalized Iran-Oman deal concerning the reopening of the Strait of Hormuz. The proposed terms include a 20% cargo value fee for transit, with Oman suggesting a 3% fee, both exceeding prior ad hoc payments. Reid highlighted concerns about Washington's acceptance of these terms, although President Trump's recent comments suggested things are "moving along good."
On the economic front, Friday's focus is on the US payrolls data. Deutsche Bank economists predict a slight uptick in headline and private payrolls, expecting an increase of 65,000 for both, which is below the consensus estimates of 80,000. They also anticipate the unemployment rate to remain stable, despite a previous month's reading that saw a decrease in labor force participation.
