U.S. futures flat ahead of jobs report

 

Wall Street futures pointed to a slightly higher open on Friday ahead of the highly-anticipated August employment report with investors hoping for the data to give indications on the timing of the next rate hike by the Federal Reserve (Fed).

The blue-chip Dow futures rose 23 points, or 0.12%, by 6:50AM ET (10:50AM GMT), theS&P 500 futures inched forward 2 points, or 0.07%, while the tech-heavyNasdaq 100 futures advanced 8 points, or 0.16%.

The U.S. Labor Department will release its August nonfarm payrolls (NFP) report at 8:30AM ET (14:30GMT) on Friday.

The consensus forecast is that the data will show jobs growth of 180,000, following an increase of 255,000 in July, the unemployment rate is forecast to dip 0.1% to 4.8%, whileaverage hourly earnings are expected to rise 0.2% after gaining 0.3% a month earlier.

An upbeat employment report will point to an improving economy and support the case for higher interest rates in the coming months, while a weak report would add to uncertainty over the economic outlook and push prospects of tighter monetary policy further off the table.

As traders await the release with more than a fair share of anxiety, odds of policy tightening at the next meeting were holding steady on Friday.

As of 6:54AM ET (10:54AM GMT), Fed fund futures put the probability of a rate hike in September at 24%, according to Investing.com’s Fed Rate Monitor Tool.

November odds were at 30.3%, while the December meeting breached the 50% threshold at 56.9%.

The dollar edged higher ahead of the NFP report with gold slipping lower on the risk of policy tightening.

Specifically, the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, gained 0.16% to 95.81 by 6:57AM ET (10:57AM GMT), while gold for December delivery on the Comex division of the New York Mercantile Exchange dropped 0.23%, or $3.05, to $1,314.05.

Later on Friday’s calendar, Richmond Fed president Jeffrey Lacker will be the first policy maker to have a chance to comment on the jobs report.

Lacker was scheduled to speak on interest rate benchmarks at 13:00ET (17:00GMT).

Though the jobs report took center stage on Friday, market participants will also digest Julyfactory orders at 10:00AM ET (14:00GMT).

Meanwhile, oil bounced back from a four-day losing streak on Friday as investors appeared to place hopes on comments by Russian President Vladimir Putin that he would like to reach an agreement on an output freeze with OPEC that would allow Iran to return output to pre-sanction levels.

Oil was still headed for its largest weekly drop in almost eight months, chalking up losses this week amid increasing skepticism among traders that OPEC would agree to freeze production at an informal meeting in Algeria later this month.

Investors also looked ahead to the Baker Hughes U.S. rig count data for the latest week.

The number of rigs operating in the U.S. in the prior week was unchanged at 406, after having risen eight straight weeks in a row.

U.S. crude futures jumped 1.11% to $43.64 by 7:03AM ET (11:03AM GMT), while Brent oilgained 1.23% to $46.01.

Elsewhere, Asian stocks closed mixed on Friday with European equities less hesitant to move higher ahead of the U.S. data.

The Nikkei flatlined while Chinese stocks eked out slight gains. Germany’s DAX trailed gainers in Europe with the benchmark Euro Stoxx 50 up 0.8%.

London’s FTSE 100 led the pack after construction sector activity jumped more than expected to within a hair’s breadth of stabilization.

 

Source: Investing.com

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