Q3 Earnings Alert! Plan early for this week’s stock reports with all key data in 1 placeSee list

Morning Bid: Markets hit tentative pause on selloff

Published 09/05/2024, 12:42 AM
Updated 09/05/2024, 12:45 AM
© Reuters. FILE PHOTO: An aerial view shows the financial and business district of La Defense, near Paris, France, July 10, 2024. REUTERS/Gonzalo Fuentes/File Photo

A look at the day ahead in European and global markets from Ankur Banerjee

Markets hit the pause button after a selloff in equities since the start of the week but sentiment remained fragile, as worries re-emerged over the prospects for the U.S. economy and investors focused squarely on this week's job reports.

Labour data on Wednesday suggested the U.S. jobs market was losing steam, raising expectations the Federal Reserve may resort to large interest rate cuts, while additional reports including Friday's non-farm payrolls data are keeping sentiment on edge.

Futures indicated European bourses were set for a subdued open after Asian shares rose 0.4% on Thursday, clawing back some of the week's losses, although the MSCI's broadest index of Asia-Pacific shares outside Japan is still down 2.2% so far this week.

Risk sentiment remained frail, with the yen holding on to its gains for the week as traders seek safe assets while the dollar was steady in Asian hours after weakness overnight.

Hawkish rhetoric from the Bank of Japan also supported the yen after BOJ board member Hajime Takata hinted the central bank should stay on course to raise interest rates.

While the spotlight this week will be on Friday's U.S. non-farm payrolls report, in the meantime Thursday's U.S. jobless claims reading and euro zone retail sales data will keep investors busy.

The markets are keen for clues on whether data will dictate that the Fed cut interest rates by 25 basis points (bps) or 50 bps when it meets later this month. Traders added to wagers of a 50 bps cut following the job openings data and are now pricing in a 44% chance, up from 38% a day earlier.

Investors are also pricing in 110 bps of cuts from the remaining three Fed meetings this year, and when you factor in the Fed's focus on the labour market, it looks like economic data in the next few weeks will be put under the microscope by increasingly skittish investors.

© Reuters. FILE PHOTO: An aerial view shows the financial and business district of La Defense, near Paris, France, July 10, 2024. REUTERS/Gonzalo Fuentes/File Photo

Key developments that could influence markets on Thursday:

Economic events: Euro zone August retail sales; August construction PMI data for Germany, France and euro zone

(By Ankur Banerjee; Editing by Edmund Klamann)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.