NEW YORK/ SINGAPORE/SHANGHAI
US stock futures rose ahead of the US jobs report for August that will be carefully watched for clues about the health of the world’s largest economy.
Futures on the S&P 500 and Dow Jones Industrial Average both rose 0.3%. The Stoxx Europe 600 edged up 0.1% in midday trade, with the German DAX up 0.4% and the U.K.’s FTSE 100 down 0.1%. The gentle rises in Europe came after Germany said Friday its industrial production unexpectedly fell in July. Trading was stronger in Asia, where the Shanghai Composite and Japan’s Nikkei were both up 0.5% and Hong Kong’s Hang Seng gained 0.7%.
China’s central bank on Friday reduced reserve requirements for lenders, marking a fresh effort to support the economy. Analysts at Citi had flagged expectations of further policy easing last month as credit data deteriorated, including cuts in the reserve ratio. The move came after Asian stock markets had already closed. The Russian central bank also cut its benchmark rate on Friday, joining a wider drive for looser monetary policy around the world since the U.S. Federal Reserve cut interest rates for the first time in a decade at its last meeting. The ruble was up 0.5% against the dollar.
Among the biggest gainers in Europe were shares of G4S, the U.K.-based security giant, which rose 6.2%. Reports earlier Friday suggested its cash solutions business could be taken over by a U.S. firm. Telenor’s shares dropped 3.3% after the Norwegian telecoms giant said it had ended talks to merge its Asian business with Axiata Group Berhad. Axiata shares gained 2.3%.
Investors will watch closely as the U.S. Labor Department releases the August jobs report later in the session. Economists surveyed by The Wall Street Journal forecast the U.S. economy added 149,000 jobs during the month and the unemployment rate remained unchanged at 3.7%.
Analysts at Barclays have flagged concerns that expectations of further interest-rate cuts from the Federal Reserve could be tempered by suggestions that the labor market is stronger than expected, sending the dollar higher. Federal Reserve Chairman Jerome Powell will make a speech in Zurich later Friday, which could provide further signals about future monetary policy. David Zahn, head of European fixed income at Franklin Templeton, said economic growth in the U.S. and China was ticking along, though markets remain jittery and focused on hopes for supportive policy from central banks.
The doom and gloom about the global economy is overdone,. Zahn said. This is all going to pass. The yield on 10-year Treasurys rose to 1.589% from 1.569% Thursday. Bond yields and prices move in opposite directions.
The price of oil remained steady even as Iran said it would abandon constraints on nuclear research set out in the 2015 nuclear deal, ratcheting up tensions with the U.S., which have led to conflict in the Strait of Hormuz. Brent crude was down 2.21% at $59.60 a barrel. Analysts have flagged concerns the price of oil could drop if the global economy slows, despite rising tensions between Iran and the U.S.
NEW YORK/ SINGAPORE/SHANGHAI