Amira Karaoud/Reuters
- US stock futures climbed Friday ahead of key nonfarm payrolls data for August.
- The jobs report is expected to show an increase of 725,000, a slowdown on July’s 943,000 reading.
- A lower-than-expected number will encourage the Federal Reserve to maintain its support for the economy, analysts said.
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US stock futures climbed on Friday while the dollar consolidated after a marked decline as investors awaited key employment data that could influence the Federal Reserve’s monetary policy.
S&P 500 futures were up 0.19% after the index on Thursday rose 0.28% to hit another record high – its 53rd this year. Nasdaq 100 futures were 0.16% higher, and Dow Jones futures were up 0.14%.
Meanwhile, the dollar stayed roughly flat ahead of the key data release, with the dollar index hovering at around 92.2.
The index has fallen from 93 on Friday last week, when Fed Chair Jerome Powell declined to commit to a timeline for the central bank to withdraw its support for the US economy. Investors have also sold the greenback ahead of Friday’s nonfarm payrolls data, which is expected to show a slowdown in hiring in August.
Elsewhere, Europe’s Stoxx 600 slipped 0.05%, and China’s CSI 300 fell 0.54% overnight. Tokyo’s Topix index jumped 1.61% to a 30-year high after Japanese Prime Minister Yoshihide Suga said he would resign, triggering hopes that his replacement may increase stimulus spending. The Nikkei 225 closed 2.05% higher.
US monthly jobs data will be published at 8.30 a.m. ET and is expected to show that nonfarm payrolls rose by 725,000 in August, according to economists polled by Bloomberg, down from the 925,000 increase in July. Yet the range of economists’ predictions is wide, ranging from 1 million to 400,000.
The data will be very closely watched by investors as it could influence the Fed’s view on when it should start “tapering” its bond purchases, which are currently running at $120 billion a month.
“My thruppence worth … a number lower than 600,000 jobs will push back tapering expectations from the Fed,” said Jeffrey Halley, senior market analyst at trading platform Oanda, in a note. “That will see markets ‘buy everything’ and sell the US dollar.”
Yet Ian Shepherdson, chief economist at Pantheon Macroeconomics, said Friday’s figures will likely have little impact on the Fed as they were gathered before schools returned. That should affect key data points, such as the labor participation rate, he said.
“We’re now expecting the tapering announcement to come in December,” he said. “By then, the Fed will have both the October and November reports, which should give the all-clear to start reducing the pace of incremental stimulus.”
The bond market was quiet on Friday, with the yield on the key 10-year US Treasury note wavering at around 1.297%. Yields move inversely to prices.
In the oil markets, Brent crude was down 0.12% to $72.96 a barrel, while WTI crude was down 0.43% to $69.69 a barrel.
Bitcoin, the biggest cryptocurrency, slipped back slightly after breaking through the $50,000 barrier on Thursday as digital assets rallied. It stood at around $49,460 on Friday.
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