(Bloomberg) — Markets settled into a holding pattern ahead of Friday’s key U.S. jobs report as European stocks and U.S. stock index futures edged higher, U.S. Treasury yields were flat and the dollar was steady. Ta.
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S&P 500 and Nasdaq 100 futures rose about 0.3% and 0.2%, respectively. Broadcom fell as much as 4.6% in premarket trading after disappointing sales forecasts.
Big energy companies outperformed the Stoxx Europe 600 index as crude oil headed for its biggest weekly gain since April. Miners soared as China’s latest economic stimulus package boosted prices for some industrial metals. Automakers fell, with Renault and Volkswagen each dropping more than 3% after being downgraded to sales by UBS Group due to increased competition from Asia. Orbis AG fell as much as 18% after Europe’s largest copper producer said it was facing significant losses due to large-scale metal theft.
Friday’s jobs report may provide further evidence that the still-tight U.S. labor market is cooling slightly. The question is whether that will be enough to delay the Fed’s tightening cycle or lead to an early rate cut. Meanwhile, the European Central Bank is unlikely to support a moratorium this month and not raise interest rates beyond the current 3.75% given the rapid economic deterioration, Morgan Stanley economists said.
“Given the resilience of the labor market and slowing inflation, I’m personally leaning towards a soft-landing scenario, so it’s likely that we’ll see a collapse in the afternoon,” said Harry Walhandler, head of equities at Meerschaert Asset Management in Paris. “I don’t expect to see any significant numbers,” he said. . “Either way, the Fed still has room to maneuver to cut rates if there is a bad surprise.”
Elsewhere, China’s renewed efforts to salvage its ailing economy pushed the MSCI Asia-Pacific index toward a second straight week of gains, the longest such streak since mid-June. The government will allow the country’s biggest cities to cut payments for homebuyers and encourage lenders to lower interest rates on existing mortgages and deposits. Meanwhile, the city of Shanghai has eased regulations on home purchase loans for residents.
Mainland Chinese stocks rose and metals prices are expected to extend their gains this week. Hong Kong markets have been closed as the city prepares for the strongest storm in at least five years.
Another factor contributing to the appreciation of the renminbi was the People’s Bank of China’s reduction of financial institutions’ foreign exchange reserve ratios in an effort to support the renminbi. The currency then slowed its gains. Sentiment was further boosted by an unexpected rise in manufacturing data for August, reaching 51, the highest reading since February, according to a Caixin survey.
Japan’s Topix index recorded eight consecutive months of gains in August, its longest winning streak since 2013, and its highest weekly percentage increase since October. Corporate profits rose at an annual rate of 11.6% in the second quarter, according to data so far.
In commodities, oil is expected to rise for the week as Russia signals it will extend export restrictions and U.S. inventories fall further. Gold heads into the second week.
This week’s main events:
South African Central Bank Governor Lesetya Kganyago, Atlanta Fed President Raphael Bostic, BOE’s Hugh Pill, and IMF’s Gita Gopinath participate in a panel discussion at the South African Reserve Bank meeting on Friday.
Boston Fed President Susan Collins speaks at Friday’s virtual event
US unemployment rate, nonfarm payrolls, light vehicle sales, ISM manufacturing, construction spending, Friday
The main movements in the market are:
stock
As of 7:57 a.m. New York time, S&P 500 futures were up 0.3%.
Nasdaq 100 futures rose 0.2%
Dow Jones Industrial Average futures rose 0.4%.
Stoxx European 600 rose 0.3%
MSCI World Index rose 0.1%
currency
Bloomberg Dollar Spot Index little changed
The euro was almost unchanged at $1.0836.
The British pound was almost unchanged at $1.2670.
The Japanese yen rose 0.2% to 145.25 yen to the dollar.
cryptocurrency
Bitcoin rose 0.1% to $26,041.88
Ether fell 0.2% to $1,646.53.
bond
The 10-year Treasury yield fell 2 basis points to 4.09%.
German 10-year bond yield remains unchanged at 2.47%
UK 10-year bond yields remained unchanged at 4.36%.
merchandise
West Texas Intermediate crude rose 1.1% to $84.56 per barrel.
Gold futures rose 0.3% to $1,971 an ounce.
This article was produced in partnership with Bloomberg Automation.
–With assistance from Tassia Sipahutar and Sagarika Jaisinghani.
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