European Stocks Trade Steady Before US Jobs Data: Markets Wrap

(Bloomberg) — European stocks and US futures fluctuated ahead of key American jobs data that will help identify the path for interest rates. An oil price rally eased after spiraling tensions in the Middle East led to the biggest one-day jump in almost a year.

The Stoxx 600 index was little changed, poised for a weekly loss as optimism over Chinese stimulus faded. Treasuries were flat after selling off on Thursday and an index of dollar strength was set for the biggest weekly gain in nearly six months as traders pared back expectations for aggressive US rate cuts. 

Amid all the geopolitical uncertainty, investors are looking for further signals on the health of the US economy, with the monthly payrolls report due on Friday. The unemployment rate is forecast to hold steady at 4.2% in September while payrolls are expected to rise by 150,000. 

“Anything that would point to a stabilizing or re-acceleration of growth will force markets to re-consider the current aggressive pricing of interest rate cuts,” said Robert Tipp, chief investment strategist at PGIM Fixed Income.

West Texas Intermediate and Brent crude edged lower after a surge of more than 5% for both to a one-month high on Thursday. Those gains came after President Joe Biden told reporters the US was discussing whether to support potential Israeli strikes against Iranian oil facilities. 

There were other signs of a robust US economy in data released Thursday. 

The Institute for Supply Management’s index of services posted its best reading since February 2023, ahead of Wall Street estimates. Applications for US unemployment benefits rose slightly last week to a level that is consistent with a limited number of layoffs. Continuing claims, a proxy for the number of people receiving benefits, were little changed from the previous week.

“The US dollar could stay supported on safe haven demand amid Middle East risks, and more so if US payrolls surprise on the upside,” Wei Liang Chang, a foreign-exchange and credit strategist at DBS Bank Ltd., wrote in a research note. “The yen may be a beneficiary too, as geopolitical risks restrain appetite for carry trades”

Key events this week: 

• US nonfarm payrolls, Friday

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 rose 0.2% as of 8:23 a.m. London time
• S&P 500 futures were little changed
• Nasdaq 100 futures rose 0.2%
• Futures on the Dow Jones Industrial Average were little changed
• The MSCI Asia Pacific Index rose 0.4%
• The MSCI Emerging Markets Index rose 0.5%

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro was little changed at $1.1032
• The Japanese yen rose 0.5% to 146.21 per dollar
• The offshore yuan was little changed at 7.0566 per dollar
• The British pound rose 0.2% to $1.3146

Cryptocurrencies

• Bitcoin rose 0.8% to $61,278.58
• Ether rose 1.7% to $2,380.89

Bonds

• The yield on 10-year Treasuries was little changed at 3.84%
• Germany’s 10-year yield advanced three basis points to 2.17%
• Britain’s 10-year yield advanced three basis points to 4.04%

Commodities

• Brent crude rose 0.3% to $77.85 a barrel
• Spot gold rose 0.2% to $2,661.54 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Divya Patil and Richard Henderson.

©2024 Bloomberg L.P.