By Lorcan Roche Kelly
Today’s jobs data may bookend the bad week in markets amid mounting signs of a slowdown coming to the U.S. For many investors, payrolls will cast a deciding vote. A temporary boost from census hiring is expected to have helped non-farm payrolls expand by 145,000, with unemployment holding at 3.7% and hourly earnings growth continue their strong trend. The numbers are released at 8:30 a.m., with a weaker-than-expected outcome likely to bolster the chances of two more Federal Reserve rates cuts by the end of the year.
From aid to Xi
Donald Trump yesterday said that China’s Xi Jinping should investigate Joe Biden and his son, doubling down on his attacks on the former Vice President. That’s even as an impeachment investigation is looking into whether the president attempted to use a military aid payment to pressure Ukraine’s leader to launch an investigation there. Text messages between U.S. diplomats, released by three congressional committees yesterday, showed that there were attempts to strike a deal with Ukraine to get the country to look into the Biden allegations. Trump, meanwhile, seems to be relying on his Mueller playbook to get through the impeachment process.
Face mask ban
Hong Kong invoked emergency powers for the first time in more than half a century to ban protesters from wearing face masks. Chief Executive Carrie Lam said the move had become necessary to stem increased violence in recent weeks, adding that the government may consider additional measures. Activists have promised to defy the ban, with protests against the administration lasting almost four months already. The benchmark Hang Seng Index dropped 1.1% to close below the key 26,000 level in the wake of Lam’s announcement.
Overnight, the MSCI Asia Pacific Index climbed 0.1% while Japan’s Topix index closed 0.3% higher with hopes rising of further Fed rates cuts boosting the bad-news-is-good-news trade. In Europe, the Stoxx 600 Index was little changed at 5:50 a.m. as trading was quiet ahead of the payrolls number. S&P 500 futures were showing some weakness ahead of the data, the 10-year Treasury yield was at 1.527% and gold was slightly higher.
As well as the big number, the August U.S. trade balance is due at 8:30 a.m. All eyes will be on the Federal Reserve in the wake of the payrolls data, so look out for comments today from Boston Fed President Eric Rosengren, Federal Reserve Bank of Atlanta President Raphael Bostic — and of course Chairman Jerome Powell who opens a Fed Listens event at 2:00 p.m.