London stocks were set to rise at the open on Friday as investors eyed the non-farm payrolls report, with M&A in focus after miners Glencore and Rio Tinto said they were in early talks over a possible merger.
The FTSE 100 was called to open around 25 points higher.
The payrolls report for December is due at 1330 GMT, along with the unemployment rate and average earnings.
Kathleen Brooks, research director at XTB, said: "The US labour market report for December is a high stakes release that has the potential to trigger significant volatility as it will tell us whether the 75bps of US rate cuts since September was the right call from the government.
"Economists surveyed by Bloomberg are expecting a reading of 70k, which is below the long run trend of 100k per month for US job creation, but is higher than the 64k November print. This data could still be impacted by the fallout from last year's federal government shutdown. We will be watching out for revisions to the November data and to see whether the unemployment rate does fall to 4.5% as expected, as furloughed workers return to their government jobs in the final weeks of the year."
Brooks said earnings growth is expected to edge up slightly to 3.6% from 3.5%, and the participation rate could fall slightly to 62.4% from 62.5% in November.
"Overall, a hawkish surprise and a reading above 85k would suggest that the US labour market is resilient and may not have needed the 75bps of Fed rate cuts last year. This could lead to a recalibration lower in interest rate expectations, currently the Fed Fund Futures market is pricing in two rate cuts for next year," she said.
"The 'good news is bad news' theme could also hit stock markets and lead to some risk aversion. Stocks could initially come under pressure if we get too good a number for payrolls, and this may hit interest rate-sensitive sectors like tech at the end of the week."
On home shores, investors will be mulling the latest data from the British Retail Consortium. It showed that that footfall across all shopping locations dropped in December, marking a disappointing end to the year for retailers, who are having to contend with weak consumer sentiment amid the rising cost of living.
Total UK retail footfall fell at a year-on-year rate of 2.9% in December, worsening from November's 0.8% decline, according to the BRC-Sensormatic footfall monitor.
High street footfall slipped 0.9% over the year before, easing from the 1.2% fall in November, but retail park traffic dropped 2.5% after a previous 0.4% fall, and shopping centre footfall fell 5.1% after decreasing 1.3% previously.
Footfall also declined year-on-year across all nations in December: down 1.5% in Scotland, 1.7% in Northern Ireland, and 3.1% in both England and Wales.
For the third quarter as a whole, retail footfall was 2.2% lower than the previous year, while 2025 footfall fell 0.8% from 2024.
BRC chief executive Helen Dickinson called it a "disappointing December for retailers".
"In the face of rising bills and food costs, many consumers held off for post-Christmas sales, with the week after Christmas the only one to see a significant uplift," Dickinson said.
"Shoppers were also browsing less in the lead up to Christmas, making fewer, but more targeted shopping trips, particularly in shopping centres, which saw the largest drop in footfall."
In corporate news, miner Glencore confirmed it was in preliminary talks with Rio Tinto about a possible combination of some or all of their businesses, which could include an all-share merger.
Responding to press speculation, Glencore said there is no certainty that the terms of any transaction or offer will be agreed, nor as to the terms or structure of any such transaction or offer, if agreed.
Under UK takeover rules, Rio has until 1700 GMT on 5 February to make a firm offer or walk away.
J Sainsbury said it remained on track to deliver annual retail profits of more than £1bn, following strong demand for food and drink in the run up to Christmas.
The supermarket, the UK's second-largest after Tesco, saw grocery sales jump 5.1% in the six weeks to 3 January, and 5.4% over the quarter. The strong showing helped offset weaker sales elsewhere.
General merchandising including clothing fell 1.1% over the 16 weeks, while at Argos, sales softened 1.0% and by 2.2% over the core six-week Christmas period. Total like-for-like sales across the group in the 16 weeks to 3 January rose 3.4%.
Safety equipment maker Halma said it had bought Italian firm Safetec for €72.5m (£63m), on a cash- and debt-free basis, to be funded from Halma's existing facilities.
Founded in 2003 and headquartered near Milan, Italy, Safetec designs, engineers and delivers customised fire and gas safety solutions for large-scale, complex and high-risk industrial projects.