S&P 500 and Nasdaq futures edged higher Friday as Asian and European shares tracked a strong Wall Street session ahead of the U.S. August jobs report. Fed Governor Christopher Waller's dovish remarks pulled the odds of a September rate hike down to 50%, while bond yields eased and the dollar slipped.
S&P 500 futures rose 0.1% and Nasdaq futures climbed 0.3% early Friday. Global equities had posted their strongest day since early August, rising 0.9% in the prior session. In the U.S., the S&P 500 rose 1.1% and the Nasdaq gained 1.4% that day.
Federal Reserve Governor Christopher Waller said recent data pointed to signs of disinflation and that he would favor holding interest rates steady this month if upcoming reports confirm the trend.
Waller's comments narrow rate-hike odds
Waller's remarks pushed futures markets to scale back the chance of a rate hike this month to just 50%, down from about 63% a day earlier. Those hike expectations had surged in recent sessions as a global bond rout drove long-dated yields to multi-year highs, fueled by concerns over stubborn inflation, swelling government debt and geopolitical tensions. Treasuries rallied on the comments, with two-year yields holding at 4.3348% after falling 5 basis points overnight, while ten-year yields were little changed at 4.7581%.
August jobs report due later Friday
Traders are bracing for the U.S. payrolls report for August, with forecasts centered on a rise of 56,000 jobs after a shock fall of 23,000 the previous month, while the unemployment rate is expected to hold steady at 4.1%. Danske Markets separately projects nonfarm payrolls at +65,000 with average hourly earnings rising 0.3% month-on-month. The forecasts follow a stronger-than-expected ISM services index of 55.4 in August, up from 54.1 in July.
Asian markets extend the rally
In Asia, the MSCI Asia-Pacific index outside Japan rose 1.5%, while Japan's Nikkei gained 1.4% but remained down 1.9% for the week. Chinese blue-chip shares rose 4% and South Korea's KOSPI increased 2%. The dollar slipped as yields eased, fetching 99 against major peers and on track for a weekly drop of 0.7%.
Sources: Investing.com/Reuters, ActionForex/Danske Markets
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