Focus turns to jobs data
In U.S, the stock market was slipping back from record high territory Friday as investor attention turned squarely to the key U.S. jobs report later in the day. A rally in stocks and bonds slowed as global central banks’ resolve to keep monetary policy accommodative was offset by concern over runaway inflation. Futures for the Dow Jones Industrial Average indicated an open 30 points lower, after the index slipped 33 points Thursday to close at 36,124. Futures for the S&P 500 and Nasdaq —which both rose Thursday to all-time highs—signaled a similar start.
The Bank of England surprised investors on Thursday by keeping its interest rate steady, the day after the U.S. Federal Reserve indicated that it would be “patient” on interest rate hikes while beginning asset tapering. European stock markets are expected to open marginally lower Friday, ending the week on a cautious note as investors digest central bank policy decisions ahead of the release of key U.S. employment data. Earlier in the week European Central Bank President Christine Lagarde pushed back against market bets for a rate hike, stating it was very unlikely such a move would occur in 2022. While in Germany, its industrial production fell 1.1% in September, disappointing hopes for a rebound from the previous month’s revised 3.5% drop. September retail sales are also due in the Eurozone, but the main release will be the U.S. nonfarm payrolls later in the session, where variables such as earnings growth and labor force participation will arguably be as important as the headline job creation number.
In Asia, China’s government bonds were set for their biggest weekly advance since July after the nation’s central bank increased its injection of short-term cash. The news focus in China hovers around Kaisa Group Holdings Ltd, shares fell in Japan and Hong Kong, where developer Kaisa Group Holdings Ltd. and its Hong Kong-listed units were suspended from trading as it plans to sell property projects valued at almost $13 billion to raise capital, the South China Morning Post reported.
The OPEC+ group of national producers—including Saudi Arabia and Russia—fell short of agreeing to increase production in December more than planned, but U.S. crude supply data this week showed that oil stocks were far higher than expected. Crude prices strengthened Friday after OPEC+ decided to maintain their stance of gradually increasing supply at a meeting Thursday, rebuffing calls for a more substantial increase in output. By 2:05 AM ET, U.S. crude futures traded 1.1% higher at $79.64 a barrel, while the Brent contract rose 0.6% to $81.05. Still, Brent is on track for a decline of nearly 4% this week, the second straight weekly drop. U.S. oil is heading for a decline this week of nearly 5%.