JOLTS survey, rate hike pause, Trump arraignment - what's moving markets

© Reuters.

By Geoffrey Smith 

Investing.com -- The Labor Department releases its Job Openings survey for February, a day after the ISM's manufacturing survey prompted fresh hopes of an early Fed pivot. Donald Trump is set to be arraigned in New York, as his main rival for the Republican nomination next year gets a tongue-lashing from Walt Disney CEO Robert Iger. Oil extends its gains after the surprise output quota cut by OPEC at the weekend. Here's what's moving markets on Tuesday, April 4th.

1. JOLTS survey to show test of labor market strength

A week full of labor market data kicks off with the Job Openings and Labor Turnover Survey at 10:00 ET (14:00 GMT), a day after a weak ISM survey stoked hopes of a quick pivot from the Federal Reserve.

Job vacancies across the country are expected to have fallen for a second straight month, although it’s worth noting that consensus forecasts have been on the low side for five months in a row. Some analysts argue that the JOLTS is overstating the strength of hiring, given that it only extrapolates from data on externally advertised jobs, which appear to account for more of total job vacancies today than they did before the pandemic.

On Monday, Federal Reserve Governor Lisa Cook had highlighted the strength of the labor market in arguing for at least one more interest rate hike. A lower-than-expected number may cause that narrative to come into question. Cook speaks again on Tuesday, at 13:30 ET. Boston Fed President Susan Collins speaks a quarter of an hour later, and Cleveland’s Loretta Mester speaks at 19:45 ET.

2. Disney boss ratchets up dispute with DeSantis as Trump faces arraignment

Walt Disney (NYSE:DIS) CEO Robert Iger blasted Florida Governor Ron DeSantis’ actions to crack down on its privileged status in the state as “anti-business” and - in what appeared to be a veiled threat to scale down investment in the state - “anti-Florida”.

DeSantis’ running battle with Disney over a controversial law banning the teaching of gender and sexuality-related issues in state classrooms is widely seen as a key part of the governor’s positioning ahead of the race for the Republican Party presidential nomination next year, allowing him to present himself as a scourge of ‘woke’ culture and over-mighty corporations.

His biggest rival for the nomination, former President Donald Trump, is set to be arraigned in New York today on charges relating to hush-money payments made to a porn star during the 2016 election campaign.

3. Stocks set to open flat; CS shareholder meeting in focus; FTC bares its teeth

U.S. stocks are set to drift at the open, with most market participants apparently more interested in the political-criminal drama expected to unfold in New York later.

By 05:10 ET (09:10 GMT), Dow Jones futures were effectively unchanged, as were S&P 500 futures and Nasdaq 100 futures. All three cash indices had gained on Monday after the ISM manufacturing PMI, a key gauge of economic activity, fell to its lowest in nearly two years.

Stocks likely to be in focus later include UBS (NYSE:UBS), against the backdrop of Credit Suisse’s (NYSE:CS) last-ever annual shareholder meeting, and French skincare giant L’Oréal (EPA:OREP), which announced its biggest acquisition in years overnight with a $2.5 billion deal for Australian-based Aesop.

Also in focus will be Illumina (NASDAQ:ILMN), after the Federal Trade Commission struck down its proposed deal to buy cancer diagnostic group Grail for $7 billion

4. Australia pauses hikes; brighter news from Germany

The Australian central bank halted a policy tightening cycle that had lasted nearly a year, leaving its cash rate unchanged at 3.60%. The Aussie was the weakest of the major currencies in overnight trading as a result. But the RBA left the door open to resuming rate hikes in the future if the current bout of financial market volatility blows over.

In Europe, meanwhile, German trade data for February suggested that Europe’s traditional growth engine was getting back into gear. Exports and imports both posted solid growth of around 4% from January. Newswires also reported that Germany’s six leading economic think tanks will upgrade their estimates for gross domestic product this year to growth of 0.3%, from a contraction of 0.4% in their last report.

Elsewhere, euro zone producer prices fell 0.5% in February, more than expected, as last year’s energy spike continued to unwind.

5. Oil extends gains ahead of API update

Crude oil prices extended their gains in the wake of OPEC’s surprise decision at the weekend to cut output quotas by over 1 million barrels a day.

By 05:25 ET, U.S. crude futures were back at nearly $81 a barrel, up 0.6% on the day. Brent futures were up 0.5% at $85.36 a barrel. Market participants have been betting that the expected growth in Chinese demand over the year will more than offset a slowdown in Western demand, a bet supported by the day’s data out of Germany.

That thesis faces its next test at 16:30 ET, when the American Petroleum Institute reports weekly inventory data for last week.