US Stocks and Treasuries Steady Before Jobs Data: Markets Wrap

(Bloomberg) — US stocks and Treasuries held steady as traders waited to see whether Friday’s payrolls report will offer the Federal Reserve enough justification to hold off on an interest-rate hike in September.

S&P 500 futures were little changed after rising by the most in a month in the previous session. Ten-year Treasury yields were down one basis point to 4.76%, while most of the curve was little changed. The relative lack of direction was evident across other asset classes too, with Brent crude hovering around $95.50 a barrel and the dollar trading flat.

The jobs report for August arrives at a time when the odds of a quarter-point Fed hike this month are roughly even. While Fed Chair Kevin Warsh last week emphasized that policymakers’ focus is firmly on inflation, employment data could help buy them time to assess whether current policy is restrictive enough to bring price pressures under control.

Economists estimate the report will show a 55,000 increase in payrolls after an unexpected dip in July employment. Such a result would be broadly in line with average job growth this year.

“The market needs a result weak enough to give the Fed a reason to keep interest rates unchanged, but not so weak that it intensifies concerns about a recession,” noted Linh Tran at XS.com. “Stronger-than-expected employment and wage growth could push yields higher again and weigh on equities.”

By contrast, figures close to expectations and accompanied by moderating wage growth would create favorable conditions for the S&P 500 to retest its record high, Tran said.

Europe’s Stoxx 600 edged higher. Volkswagen AG rose as much as 9.7% after a major restructuring announcement. The region’s bonds underperformed, with UK gilts posting the biggest losses.

In Japan, the yen held most of its gains after advancing more than 2% on Thursday, nearing levels last seen in May following the Ministry of Finance intervention.

Corporate Highlights:

Volkswagen AG’s supervisory board backed a sweeping restructuring that calls for 50,000 additional job cuts, far fewer models and a smaller industrial footprint. Anthropic PBC is set to finalize an expansion of its revolving credit facility to $15 billion, according to people familiar with the matter. OpenAI is releasing a new generation of its technology called GPT-6 that the company is positioning as a key milestone in a push to build so-called artificial general intelligence. Some of the main moves in markets:

Stocks

The Stoxx Europe 600 rose 0.1% as of 8:30 a.m. London time S&P 500 futures were little changed Nasdaq 100 futures rose 0.4% Futures on the Dow Jones Industrial Average were little changed The MSCI Asia Pacific Index rose 0.8% The MSCI Emerging Markets Index rose 1.4% Currencies

The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1629 The Japanese yen fell 0.3% to 156.27 per dollar The offshore yuan rose 0.1% to 6.7096 per dollar The British pound rose 0.2% to $1.3547 Cryptocurrencies

Bitcoin fell 0.7% to $80,901.42 Ether rose 0.3% to $2,512.65 Bonds

The yield on 10-year Treasuries declined one basis point to 4.76% Germany’s 10-year yield advanced one basis point to 3.36% Britain’s 10-year yield advanced three basis points to 5.17% Commodities

Brent crude rose 0.2% to $95.72 a barrel Spot gold was little changed This story was produced with the assistance of Bloomberg Automation.

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