Markets in turmoil ahead of key US jobs data By Reuters

By Stella Qiu

SYDNEY (Reuters) – Asian shares clung to tight ranges and the dollar fueled losses on Friday as investors grappled ahead of U.S. jobs data that could decide the size and speed of future interest rate cuts in the biggest economy from the world.

As of now, oil prices are posting their worst week in more than a year to sit just above a critical chart level, their near-term fate dependent on the payrolls report due later in the day . (OR)

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.2 percent, having fallen 2.3 percent so far this week. It fell 0.1% to fall 3.9% for the week.

China’s stock markets opened mixed, while Hong Kong’s were wide.

Nervous markets, however, sent Nasdaq futures down 0.6 percent, while they fell 0.3 percent.

The Japanese yen is vulnerable to a sharp pullback after rising 2 percent this week and was 0.1 percent higher at 143.27 per dollar.

Much is riding on the US non-farm payrolls report after Federal Reserve Chairman Jerome Powell said policymakers do not welcome any further slack in the labor market, setting the stage for an interest rate cut in September.

Analysts are looking for an increase of 165,000 new jobs and a drop in the unemployment rate to 4.2%.

However, risks are now receding after weak jobs and fewer private-sector job gains led markets to raise the chance of a half-point Fed rate cut to 42 percent this month.

Influential Fed Governor Christopher Waller and New York Fed President John Williams will speak after the jobs data, giving the market almost instant reaction.

Analysts at ING said that even if payrolls were in line with expectations, markets could still discount the chance of a 50 basis point cut.

“We suspect that the market is actually positioned for a number below 100,000. If we don’t get that kind of validation for the material slowing down, yields will be under pressure to go up a bit,” said Padhraic Garvey, regional head of research. America, at ING.

Bonds rallied earlier in the week, though gains could quickly reverse on payrolls data. Two-year Treasury yields have fallen 17 basis points so far to 3.7520%, the lowest since early 2023.

Ten-year yields fell 18 bps to 3.7330%, with the two-year spread poised to turn positive.

Oil is facing its worst week since October 2023 as demand concerns hit a big draw in US stockpiles and a delay in production increases by OPEC+ producers. (OR)

Supply woes have failed to push crude prices higher. Futures settled on Friday, up 0.2 percent at $72.8 a barrel, but are down 7.6 percent so far this week.

They have been pegged near a key range of $70 to $71, a break of which would pave the way for late-2021 highs.

Gold was flat at $2,514 an ounce, just a touch below a record high.

In bid news, Japanese retail giant Seven & i Holdings said on Friday it rejected Canada’s Alimentation Couche-Tard’s $38.5 billion bid for the company because the proposal was not in the best interests of shareholders.