A cautious tone dominated markets before a key US jobs report that may give traders insight on the Federal Reserve’s policy path.
US equity futures edged lower. Modest gains in the dollar put the greenback on course to rise for the ninth week out of the last 10. Treasury yields ticked higher. Oil extended its slide to a third day.
Economists estimate that US nonfarm payrolls rose by 220,000 in November as hiring rebounded from weather-related and strike disruptions. It’s the final payrolls report before the Fed’s next interest-rate decision, with swaps trading putting the odds of a quarter-point reduction later this month at around 65%.
“If we get a surprisingly hot number, you can expect pricing to come back more to 50-50,” said Michael Brown, a senior strategist at Pepperstone. “Given the time of the year, market volumes are lighter than usual, so you are more likely to see an outsize reaction — and that’s another reason for people to sit on their hands.”
France’s week of political tumult was set to end positively in markets. The nation’s bonds outperformed euro-area peers after National Rally leader Marine Le Pen told Bloomberg News a budget could be delivered within weeks. The euro was steady. The CAC 40 index climbed more than 1%, rising for a seventh day in the longest winning streak in almost 10 months.
Friday’s US labor market reading will have a big say over whether the S&P 500 can build on its 27% rally this year. Excitement…
