Morning Bid: All eyes on jobs

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By Anna Szymanski

LONDON, September 5 (Reuters) -What matters in U.S. and global markets today

By Anna Szymanski, Editor-In-Charge, Reuters Open Interest 

Global equities rose on Friday, supported by growing expectations of a U.S. interest rate cut. All eyes will be on the upcoming U.S. jobs report later today, which could confirm signs of a weakening labour market and reinforce the case for easing by the Federal Reserve.

* The STOXX 600 and FTSE 100 gained in early trading as did Asian markets, after the S&P 500 hit another record high yesterday on news that U.S. jobless claims were higher than expected. Traders now appear nearly certain that the Fed will cut interest rates when it has its two-day meeting on September 17. The dollar consequently gave back some of its weekly gains early on Friday.

* Long-dated European yields retreated from multi-year highs. They had spiked earlier this week, partly reflecting investor concern about government finances across the pond. UK borrowing costs had hit their highest level since 1998 earlier in the week.

* Oil is heading for its first weekly loss in three weeks on concerns about rising supply and weakening demand. Reuters reported on Wednesday that eight members of OPEC+ will consider raising production further at a meeting on Sunday. Meanwhile, U.S. crude inventories rose 2.4 million barrels last week, rather than falling as analysts expected.

Today the ROI team will offer you some weekend reading suggestions away from the headlines.

Today’s Market Minute

* President Donald Trump gave Japanese automakers some relief by cutting his high U.S. tariffs on their vehicles, but the reduced levies still mean big pain for Japan’s smaller car companies, which will stay under pressure in the crucial market.

* Gold prices edged higher on Friday and were on track for their best weekly gain in three months, as expectations of a Federal Reserve rate cut bolstered bullion’s appeal, while investors awaited U.S. non-farm payrolls data due later in the day.

* Twenty-six nations have pledged to provide postwar security guarantees to Ukraine, which will include an international force on land, sea and in the air, French President Emmanuel Macron said after a summit meeting of Kyiv’s allies on Thursday.

* Worries over inflation, deteriorating U.S. fiscal health, Federal Reserve independence, and geopolitical instability are raising questions about the stability of long-term Treasuries. In response, many central banks are turning back to that “barbarous relic”, gold, writes ROI markets columnist Jamie McGeever.

* The $18.7 billion bid by Abu Dhabi National Oil Company (ADNOC) for Australian liquefied natural gas producer Santos is facing a far higher hurdle than just the amount of money on offer. Read the latest from ROI columnist Clyde Russell.

Weekend reading suggestions

Here are some articles away from the day-to-day headlines that you may find interesting, suggested by the Reuters Open Interest team.

1. Mike Dolan, Editor-at-Large for Finance & Markets: Critical tounderstanding what happens next with the dollar, Council onForeign Relations fellow Brad Setser dissects the data on whatreally happened when the dollar surged during the banking crashof 2008 – and debunks a myth that foreign capital flowed to theUnited States during the white heat of that crisis. 2. Ron Bousso, Energy Columnist: The book Chokepoints: How the GlobalEconomy Became a Weapon of War by Edward Fishman offers afascinating look at how the United States has turned economicsanctions into a major diplomatic lever.  3. Andy Home, Metals Columnist: What makes a critical metal“critical”? The answer is here in the latest U.S. GeologicalSurvey.  4. Jamie McGeever, Markets Columnist: President Donald Trump abruptlyfired Erika McEntarfer, head of the US Bureau of LaborStatistics, in reaction to the weak July payroll report. Theindependent thinktank OMFIF writes that this triggeredfrightening flashbacks to the Argentina of nearly two decadesago. 

Chart of the day

Gold is on track for its strongest weekly gain in three months, largely thanks to rising expectations of a Federal Reserve rate cut. ROI markets columnist Jamie McGeever discusses a major milestone for the yellow metal: it now represents a bigger share of central banks’ reserves than Treasuries for the first time since 1996.

Today’s events to watch

* U.S August nonfarm payrolls

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Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

(By Anna Szymanski)