US stock futures held onto gains and short-dated Treasuries trimmed losses after weaker-than-expected private jobs data reassured traders.
(Bloomberg) — US stock futures held onto gains and short-dated Treasuries trimmed losses after weaker-than-expected private jobs data reassured traders.
Revamped ADP data showed US companies increased headcount at a relatively sluggish pace in August, a metric that the hawkish Federal Reserve will consider when contemplating September’s rate hike.
Several Fed officials since Friday have reiterated their resolve to tamp down on inflation with aggressive rate hikes. Cleveland Fed President Loretta Mester added to that on Wednesday, making it clear she doesn’t expect the central bank to cut rates next year. The Fed has now ditched its soft landing goal and is instead aiming for a “growth recession,” which would mean a protracted period of meager growth and rising unemployment.
Investors are scouring incoming data for clues on the policy path, with August US jobs figures on Friday the next key report.
“What’s clear is that predicting this market is not clean cut,” Angeline Newman, a managing director at UBS Global Wealth Management, said on Bloomberg Television. “We are living in a world where conflicting economic signals are making the path of monetary policy very difficult to determine.”
Oil is heading for a third monthly drop — the longest losing run in more than two years — hampered by the likelihood of slower global growth.
Meanwhile, euro-area inflation accelerated to another all-time high, strengthening the case for the European Central Bank to consider a jumbo interest-rate hike when it meets next week. ECB Governing Council member Joachim Nagel urged a “strong” reaction.
Investors are also contending with mounting friction between Beijing and Taipei after Taiwanese soldiers fired shots to ward off civilian drones and evaluating the latest Chinese data, which indicated factory activity shrank for a second month. Power shortages, a property sector crisis and Covid outbreaks all took a toll.
Here are some key events to watch this week:
- ECB Governing Council members due to speak at event Tuesday through Sept. 2
- China Caixin manufacturing PMI, Thursday
- US nonfarm payrolls, Friday
- UK leadership ballot closes Friday. Winner announced Sept. 5
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Some of the main moves in markets:
Stocks
- Futures on the S&P 500 rose 0.4% as of 8:53 a.m. New York time
- Futures on the Nasdaq 100 rose 0.8%
- Futures on the Dow Jones Industrial Average rose 0.1%
- The Stoxx Europe 600 fell 0.5%
- The MSCI World index fell 0.8%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.0006
- The British pound fell 0.2% to $1.1635
- The Japanese yen rose 0.2% to 138.58 per dollar
Bonds
- The yield on 10-year Treasuries advanced three basis points to 3.13%
- Germany’s 10-year yield advanced two basis points to 1.53%
- Britain’s 10-year yield advanced nine basis points to 2.79%
Commodities
- West Texas Intermediate crude fell 2.9% to $88.96 a barrel
- Gold futures fell 0.8% to $1,722.50 an ounce
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