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European shares and Wall Street futures rose on Friday ahead of the closely watched U.S. jobs report, which will weigh heavily on whether the Federal Reserve raises or holds rates steady at its November meeting.
Europe’s Stoxx 600 and Germany’s Dax rose 0.2% and 0.1%, respectively, in early trade. The move came a day after euro zone core inflation, which excludes volatile energy and food prices and is closely watched by the European Central Bank, fell to 5.3% in August from 5.5% in July.
London’s FTSE 100 rose 0.3%, led by energy and basic materials groups including BP, Shell and Glencore.
In the U.S., S&P 500 futures rose 0.1% and Nasdaq 100 futures rose 0.2% ahead of U.S. jobs data for August, which is expected to show nonfarm payrolls rose by about 170,000 last month. That would mark the slowest pace of job creation since January 2021.
If that number goes down, then “there’s a very real reason the Fed is done raising rates, but that fact shouldn’t cause investors to lose their minds and buy everything they can see,” said Mike Zieger, head of the firm. Monte (Mike Zigmont) said. Trade with Harvest Volatility Management.
“If data is hot, we’ll remain in this will-or-don’t world for a while,” he added.
The state of the U.S. labor market has become a concern for investors and economists in recent months, with the world’s largest economy continuing to add jobs and report rising wages despite aggressive monetary tightening by the Federal Reserve.
However, data released this week suggested that the job market may be starting to cool: Job vacancies fell to the lowest level in more than two years in July.
“We haven’t had any recent data suggesting the Fed will raise rates in September and the odds of a rate hike later this year are fading,” said Steven Blitz, chief U.S. economist at TS Lombard.
Meanwhile, in Asia, China’s CSI 300 rose 0.7% following an unexpected increase in Chinese manufacturing activity last month.
Caixin’s manufacturing purchasing managers’ index for August came in at 51, pointing to economic expansion, higher than the forecast of analysts polled by Reuters, who expected the index to come in at 49.3.
In commodity markets, international benchmark Brent crude rose 0.4% to $87.19 a barrel, while U.S. West Texas Intermediate crude also rose to $84.02 after Russia expressed support for deeper production cuts.