Source: Sharecast
The FTSE 100 was called to open around 10 points higher.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: "The main story remains the global bond selloff. Sovereign bonds in developed economies are under pressure, with long-maturity yields near multi-decade highs on the back of ballooning debt, political obstacles to fiscal tightening and structurally higher inflation. To finance higher debt servicing costs, governments are issuing more bonds - further pushing yields higher.
"The US 30-year yield briefly tested the 5% psychological level before retreating, while a softer-than-expected JOLTS report - with job openings falling to a one-year low - reinforced expectations of a slowing labour market. The US 2-year yield fell to its lowest this summer, with futures pricing a 95% probability of a September 25bp Fed cut.
"Markets now await ADP data today and nonfarm payrolls Friday to confirm the trend. A soft ADP read today and weak official jobs data on Friday could further support this trend and pull yields lower. We’re yet to see whether the steepening of the yield curve will slow, now that the 30-year bond offers around 5%. Upcoming rate cuts could boost medium- to long-term inflation expectations and keep the long end under pressure. Indeed, the 2-year yield is pushing lower, while the 30-year yield shows a modest rebound this morning."
On the UK macro front, the S&P Global construction PMI for August is due at 0930 BST.
In corporate news, building materials distributor and DIY retailer Grafton held annual guidance and announced a new £25m share buyback after interim profits jumped 19% to £91.5m on the back of a strong contribution from non-UK operations.
The company said operations in Spain and Ireland helped drive a 10% rise in revenue to £1.25bn.
Anglo American raised $2.5bn from the sale of its remaining stake in Valterra Platinum, fully exiting the South African mining company after its demerger earlier this year.
The company sold 52.2 shares via an accelerating bookbuild offering to institutional investors at a price of ZAR845 a share, generating cash proceeds of ZAR44.1bn. The transaction followed a 23% surge in Valterra’s share price since it was spun off from Anglo in May.
Self-storage firm Safestore said it had seen continued momentum across stores in all markets in the three months ended 31 July, supported by growth from opened developments.
Safestore said total revenues were up 5.8% year-on-year at £59.6m, while like-for-like revenues advanced 3.5% to £57.9m.