• Home
  • Posts
  • Global equities mixed ahead of key labor payrolls report (NFP) that could influence upcoming Fed rate decisions

Global equities mixed ahead of key labor payrolls report (NFP) that could influence upcoming Fed rate decisions

Olusegun Enujowo

Analyst

European equities are trading slightly higher, with the Stoxx 600 up 0.5% currently. Miners lead the pack on news of a Chinese iron-ore buying agency's discussions with global suppliers. However, gains were tempered by concerns in the energy sector, with oil witnessing its steepest weekly drop since March driven mostly by demand worries. In addition to this, the recently released German factory orders came in better than expectations, giving European investors a sliver of optimism.

US equity futures are trading slightly lower with the US500 and US100 experiencing slight pre-market selling. A key factor underpinning market sentiment is the upcoming US nonfarm payrolls report. Investors are anticipating a slowdown in hiring last month, potentially relieving the Federal Reserve from immediate interest rate hikes but concerns are high that hiring remained robust which would cause further selling in stocks as it gives the Fed more reasons to remain on it's restrictive course.

 There will be little movement before the NFP report - which will be released before NYSE opening (12:30 UTC+0). While job-openings exceeded forecasts, ADP's employment figures weren't as as clear. The speculation is that should the nonfarm payrolls underwhelm, it could substantiate recent trends of a softening labor market which would also help cooling inflation. In addition to this, investors await next week's inflation data to help paint a clearer picture on US economic health. 

Treasury yields remain relatively unchanged, while the USD strength remained largely unchanged. Investors speculate the next week's data could significantly sway these, particularly the yield on the 10-year Treasury bond.

While global focus remains on interest rates, the San Francisco Fed President, Mary Daly, is suggesting a hold on rates if inflation indicators and the jobs market decelerate.

 In Asia, stocks performed overall positively. The Hang Seng Index in Hong Kong surged by over 1%. The Japanese Nikkei 225, however, closed slightly in the red. Stocks were also bolstered by hints of an official US visit by China’s Vice Premier and Foreign Minister, fueling prospects of an international summit.

Crude oil futures hit lows reminiscent of August figures, with reports suggesting an overreaction to rising US gasoline inventories data. Despite this slump, projections by analysts such as Goldman Sachs, remain bullish on oil's outlook. 

Russia resumed seaborne diesel exports with conditions after a recent ban, imposes high duties on certain exporters, and reinstates refinery subsidies to balance domestic pricing.

Key events today:

EUR Factory Orders - 06:00 UTC+0 (released)

CAD Unemployment Rate - 12:30 UTC+0

USD Non Farm Payrolls, Unemployment Rate - 12:30 UTC+0

Use your preferred trading platform

Register Now


Payment Options

What Clients Say?