FTSE 100 on the back foot, with National Grid among the leading fallers and price pressures in Eurozone

9.26am: Eurozone economy picks up  The Eurozone economy is picking up a little better than expected, to judge from the latest IHS Markit survey. Both the services purchasing managers index and the composite one (which includes both services and manufacturing) for May have picked up the pace of recovery.   Eurozone Markit Services PMI May F: 55.2 (est 55.1; prev 55.1) Eurozone Markit Composite PMI May F: 57.1 (est 56.9; prev 56.9) — LiveSquawk (@LiveSquawk) June 3, 2021 It was the service sector that lead the way, said IHS: "May’s data indicated a second successive monthly rise in service sector output, and the best recorded for nearly three years. Nonetheless, despite seeing the slowest growth for three months, manufacturing output continued to a rise at a sharper rate than services activity." But for those worried about inflation, there were signs of cost pressures with input prices increasing by the most in over a decade and - with companies trying to pass these on - output prices rising at the strongest rate in the series history. Chris Williamson, chief business economist at IHS Markit said: “A growing area of concern is capacity constraints, both in terms of supplier shortages and difficulties taking on new staff to meet the recent surge in demand. This is leading to a spike in price pressures, which should ease as supply conditions improve, but may remain an area of concern for some months, especially if labour shortages feed through to higher wages.” Meanwhile, back in the UK, the FTSE 100 continues to decline ahead of the latest UK services data, down 50.02 points or 0.7% at 7057.98. 9.07am: Ex-divs help drag down market Another factor dragging the leading index lower is the usual Thursday tradition of companies seeing their shares go ex-dividend. So National Grid PLC (LON:NG.) is down 4.72% at 915.3p while Kingfisher PLC (LON:KGF) has fallen 2.74% to 344.1p. Overall the decline in the FTSE 100 has accelerated as investors await key service sector data from the UK and jobs figures from the US. These are likely to be scrutinised for any signs of inflationary pressures, still a current market obsession. Meanwhile the leading index is down 46.65 points or 0.66% at 7061.35. 8.51am: Leading shares drift lower The FTSE 100 bucked the wider global market trend and drifted lower in the opening exchange. However, the scale of the decline and the lack of real volume behind it suggests the momentum could quickly shift later in the session, particularly if, as the stock futures suggest, Wall Street opens in positive territory. “Markets are treading water ahead of more economic data points which will further inform the inflation debate,” said Richard Hunter, head of markets at Interactive Investor. “One of the drivers of market jitters around inflationary pressures has been bottlenecks in the labour market, and over the next two days the jobless claims number and the non-farm payrolls reading will provide new evidence on the state of the nation. “The oil price is another driver of concern as there does not seem to be any excess supply coming on stream for the moment from the major producing countries. The price is ahead by 39% in the year to date, partially driven by an anticipated spike in demand, and the effect of this inevitably puts further upward pressure on prices.” Proving the old stock market adage that it’s better to travel than arrive, B&M European Value Retail (LON:BME) was marked down 4% in the early exchanges after what on the face of it was a solid set of results. With the stock up 41% over the past year, some investors may be looking to book some profit on their investment. There was also a minor warning that trading continued to be volatile at a weekly and category level. BT (LON:BT.A) fell 3% after Deutsche Bank’s analyst switched their recommendation on stock in the telco to ‘sell’. 6.50 am: Front foot start predicted The FTSE 100 is set to start Thursday on the front foot although through this shortened week markets are marking time somewhat. CFD firm IG Markets sees the London benchmark up around 16 points, making a price of 7,113 to 7,116 with just over an hour to go until the open. US employment stats – the first of which comes out tonight - are the main macro-focus along with European PMI data, also due later. The monthly stats come as inflation remains not very far from policy maker’s thinking, and the usual central bank second-guessing is bound to follow shortly after the respective prints. The corporate diary is quite light again in this bank holiday week, albeit discount retailer B&M and water utility Pennon are among the notable names in the book for Thursday. Last night saw a muted but slightly positive markets. Wall Street finished Wednesday positively, albeit only slightly. The Dow Jones added just 25 points or 0.07% closing at 34,600, whilst the S&P 500 similarly gained just 0.14% to finish the day at 4,308. The Nasdaq was up 19 points or 0.14% ending Wednesday at 13,756. In Asia, trading was mixed. Japan’s Nikkei advanced 131 points or 0.45% to 29,076. Hong Kong’s Hang Seng slipped 184 points or 0.6% lower to 29,121, whilst the Shanghai Composite edged slightly higher to trade at 3,606. Around the markets The pound: 1.4152, down 0.13% Gold: US$1,901 per ounce, down 0.35% Silver: US$27.99 per ounce, down 0.59% Brent Crude: US$71.89 per barrel, up 2.3% WTI Crude: US$69.34 per barrel, up 2.4% Bitcoin: US$38,793, up 5.56% 6.50am: Early Markets - Asia / Australia Stocks in the Asia-Pacific region were mostly higher on Thursday as Australia’s retail sales rose 1.1% month-on-month in April on a seasonally adjusted basis, according to the country’s Bureau of Statistics. The Shanghai Composite in China lifted 0.24% but Hong Kong’s Hang Seng index fell 0.61% In Japan, the Nikkei 225 gained 0.29% while South Korea’s Kospi rose 0.79%. Shares in Australia lifted, with the S&P/ASX 200 trading 0.50% higher. 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Twenty Seven Co Ltd (ASX:TSC) has completed a 662 hole auger drilling campaign for 987 metres over the entire Yarbu tenement package, providing an unparallel geochemical insight into an underexplored part of the Marda-Diemals Greenstone Belt. Shree Minerals Limited (ASX:SHH) has discovered new copper occurrences during its first site visit to the Edwards Creek Project in the Northern Territory and this comes at a time of very positive copper market fundamentals. Matador Mining Ltd (ASX:MZZ) (OTCMKTS:MZZMF) (FRA:MA3) has boosted its landholding across a major Newfoundland gold region following a strategic review.