(Bloomberg) — European stocks and U.S. futures were volatile ahead of key U.S. jobs data that will help determine the course of interest rates. Oil prices fell after escalating tensions in the Middle East led to the largest single-day jump in almost a year.
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There was little change in the Stoxx 600 index, as it prepares for a weekly loss as optimism about Chinese stimulus fades. Treasuries stabilized after Thursday’s sell-off, and the dollar strength index was on track for its biggest weekly gain in nearly six months, as traders trimmed their expectations for deep cuts in US interest rates.
Amid all the geopolitical uncertainty, investors are looking for more signs about the health of the US economy, with the monthly jobs report released on Friday. The unemployment rate is expected to remain steady at 4.2% in September, while jobs are expected to rise by 150,000.
“Anything that would signal a stabilization or re-acceleration of growth will force markets to reconsider the current aggressive pricing of interest rate cuts,” said Robert Tibb, chief investment strategist at PGIM Fixed Income.
WTI and Brent crude fell after rising more than 5% each to a one-month high on Thursday. These gains came after President Joe Biden told reporters that the United States was discussing whether to support potential Israeli strikes against Iranian oil facilities.
There were other signs of a strong US economy in data released on Thursday.
The Institute for Supply Management’s services index recorded its best reading since February 2023, ahead of Wall Street estimates. US jobless claims rose slightly last week to a level consistent with a limited number of layoffs. Continuing claims, an indicator of the number of people receiving benefits, were little changed from the previous week.
“The US dollar could remain supported by safe-haven demand amid Middle East risks, and even more so if US payrolls surprise rise,” Wei Liang Zhang, foreign exchange and credit strategist at DBS Bank Limited, wrote in a research note. . “The yen may also benefit, as geopolitical risks limit appetite for carry trades.”
Main events this week:
Some key movements in the markets:
Stocks
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The Stoxx Europe 600 Index was up 0.2% as of 8:23 a.m. London time
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S&P 500 futures were little changed
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Nasdaq 100 futures rose 0.2%
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Dow Jones Industrial Average futures were little changed
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MSCI Asia Pacific Stock Index rises 0.4%
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MSCI Emerging Markets Index rises 0.5%
Currencies
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The Bloomberg Dollar Spot Index was little changed
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There was little change in the euro at $1.1032
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The Japanese yen rose 0.5 percent to 146.21 yen to the dollar
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There was little change in the yuan in external transactions at 7.0566 to the dollar
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The British pound rose 0.2 percent to $1.3146
Cryptocurrencies
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Bitcoin rose 0.8% to $61,278.58
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Ethereum rose 1.7% to $2,380.89
Bonds
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The yield on 10-year Treasury bonds was little changed at 3.84%.
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The yield on German 10-year bonds rose three basis points to 2.17%.
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The UK 10-year bond yield rose three basis points to 4.04%.
Goods
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Brent crude rose 0.3 percent to $77.85 a barrel
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Spot gold rose 0.2 percent to $2,661.54 an ounce
This story was produced with assistance from Bloomberg Automation.
–With assistance from Divya Patel and Richard Henderson.
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