European stocks and global government bonds were on hold on Thursday as investors awaited US employment data that could affect the path of central bank support to the economy and financial markets.
Trading near its all-time high, the Stoxx 600 gained 0.1 in early trading. The London FTSE 100 was flat and the futures markets signaled that Wall Street’s S&P 500 and the Nasdaq Composite would also drift in early New York deals.
The yield on the 10-year US Treasury bond, which is moving in the opposite direction to its price and reacts to perceived changes in future interest and monetary policy, was constant at 1.299 percent. The German government bond yield also remained unchanged at minus 0.376 percent.
Economists surveyed by Bloomberg expect Friday’s Non-Farm Payroll Report, a monthly data release that traders around the world scrutinize for evidence of the health of the world’s largest economy, shows U.S. employers found 750,000 jobs as of August have created.
The Federal Reserve, which issued $ 120 billion in bonds every month throughout the pandemic,
A higher-than-expected number is “something the markets would be comfortable with,” said Sebastian Mackay, Invesco’s multi-asset fund manager, as traders tied expectations of a Fed stimulus cut with the notion that it would US economy recovers strongly from last year corona-induced shocks.
A lower number suggesting a US labor shortage would worsen, Mackay added, would raise fears of rising consumer price inflation after stabilizing at a 13-year high last month. This could shift market expectations for future rate hikes, he said. “So you could see higher bond yields and stock problems.”
In Asia, the stock markets were mostly subdued on Thursday. Tokyo’s Topix and Hong Kong’s Hang Seng indexes were both 0.1 percent ahead, although the Hang Seng sub-index outperformed Chinese technology stocks by 1 percent. Wall Street’s technology-centric Nasdaq Composite has also outperformed the broader S&P 500 in the past two weeks.
Patrick Spencer, vice chairman of equities at RW Baird, said investors would add to their holdings in large tech companies to isolate their portfolios from a potential economic slowdown brought about by the proliferation of the Delta variant of Covid-19, too the US is caused as Asia. Every fifth US state reported a record high in Covid-19 hospital admissions in August.
“When you’re worried about growth, tech stocks usually come up as a means of defense,” Spencer said, especially after these stay-at-home companies weathered last year’s bans.
Currency markets were also calm on the Thursday before the salary data. The dollar index, which measures the US currency against six others, traded flat after weakening over the past couple of sessions. The euro was stable against the dollar at $ 1.1844. The pound sterling was also flat at $ 1.3779.
Brent crude, the international oil benchmark, was unchanged at $ 71.58 a barrel after OPEC and its allies agreed on Wednesday to pump an additional 400,000 barrels per day in September
“Opec + has continued its planned increase in offer. . . as demand improves. However, we expect the group to remain vigilant with any upcoming meeting given the uncertainty of demand, ”said Citi analysts.