By Lorcan Roche Kelly
If yesterday’s ADP report is any guide, today’s jobs number may surprise to the upside. Nonfarm payrolls are expected to show an increase of 160,000 in August when the data is released at 8:30 a.m. Eastern Time. The headline figure is likely to be driven higher by Census Bureau hiring, with economists saying the underlying number may show slowing job gains. The unemployment rate is projected to hold at 3.7% while wage growth is seen cooling to 3%.
With less than two weeks to go to another hotly anticipated Federal Reserve meeting, today’s speech by Chairman Jerome Powell at 12:30 p.m. will be monitored closely by investors looking for any update on his thinking for the next policy move. While an interest rate cut is expected at the Sept. 17-18 gathering, policymakers remain split on the need for how much, if any, easing is needed. Powell’s speech will be the last scheduled public comments by an FOMC member ahead of that decision.
One central bank that’s not waiting around to ease policy is the People’s Bank of China, which this morning cut its reserve ratio by 0.5%. The move had been flagged earlier this week when the government called for “timely” use of tools including broad and targeted reserve-ratio cuts to support the economy. With some banks getting an extra 1% reduction, the decision will release 900 billion yuan ($126 billion) in liquidity, according to the monetary authority.
Overnight, the MSCI Asia Pacific Index climbed 0.5% while Japan’s Topix index closed 0.2% higher to cap its best week in two months. In Europe, the Stoxx 600 Index rose gained 0.2% by 5:40 a.m Eastern Time. S&P 500 futures pointed to a higher open, the 10-year Treasury yield was trading at 1.591% and gold dropped near toward $1,500 an ounce.
It’s also jobs day in Canada, with unemployment data at 8:30 a.m. The latest Baker Hughes rig count is at 1:00 p.m. Mexican Foreign Minister Marcelo Ebrard is scheduled to meet U.S. Secretary of State Mike Pompeo in Washington and Brazil’s President Jair Bolsonaro convenes a meeting on the Amazon fires. Dorian, now downgraded to a Category 1 storm, continues to slowly make its way up the coast of the Carolinas.