As the European session begins, markets are trading cautiously ahead of today’s key U.S. non-farm payrolls report, which is expected to give further insight into the Federal Reserve’s upcoming decision on interest rates. A 25-basis point rate cut is anticipated later this month, but the data could shift expectations if it reveals surprises in the labor market.
In Asia, the session has already wrapped up with mixed results. The Nikkei 225 closed down 0.62% at 36,422.50, losing 226.50 points as investors grappled with concerns over a strong yen. Meanwhile, the Hang Seng in Hong Kong was closed due to a typhoon warning.
European markets opened lower, reflecting a cautious mood ahead of the U.S. job data release. The FTSE 100 fell 0.39% to 8,209.53, while France’s CAC 40 lost 0.58%, sitting at 7,389.05. Germany’s DAX showed a sharper decline, dropping 0.85% . The Euro Stoxx 50 also slipped 0.66% to 4,783.25, as the ECB’s interest rate stance continues to hang in the balance with inflation concerns still prominent.
Treasury yields in the U.S. softened slightly ahead of the key labor data, with the 10-year yield down to 3.731%, reflecting cautious positioning among investors. Yields on the 5-year and 30-year Treasuries also dropped.
In the futures market, U.S. indices are signaling a negative start. Dow futures were down 184 points, with S&P 500 futures losing 39.50 points, reflecting continued anxiety around the Fed’s next moves. Nasdaq 100 futures were hit hardest, down 1.17%, as technology stocks remain sensitive to changes in interest rates.
Oil prices moved higher, with crude oil futures up 0.45% to $69.46 per barrel, boosted by supply concerns. Gold inched up by 0.25% to $2,549.50, with some investors seeking refuge in safe-haven assets amid the uncertainty surrounding interest rates and economic data. In contrast, Bitcoin fell sharply by 1.96% to $55,464.
In the forex market, the euro was trading slightly up at 1.1116 against the U.S. dollar, while the pound also gained modestly, with GBP/USD up 0.04% at 1.3182. The yen strengthened against the dollar, with USD/JPY down 0.80% to 142.29, as risk aversion led to yen buying ahead of the critical jobs report.
U.S. equities closed lower on September 5, with the Dow Jones Industrial Average shedding 0.54%, the S&P 500 falling 0.30%, and the Nasdaq bucking the trend with a modest gain of 0.25%.
As the day unfolds, markets are likely to remain volatile, with the U.S. jobs report set to be a key determinant of sentiment across global financial markets.
