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It's a huge day for global markets as U.S. payrolls data for August are released, potentially setting the stage for a Fed rate hike this month. Meanwhile, Putin moves oil and the euro area continues its battle on two fronts: the Brexit vote and disinflation. Here are some of the things people in markets are talking about today.
The Bureau of Labor Statistics will publish U.S. payrolls data for August at 8:30 a.m. in New York, with economists surveyed by Bloomberg expecting the economy to have added 180,000 positions — in line with the monthly average for 2016 — while the unemployment rate is forecast to decline to a three-month low of 4.8 percent from 4.9 percent. Analysts expect the data will indicate U.S. hiring is settling into a more sustainable pace after strong advances in the previous two months. Last week, Federal Reserve officials reiterated the prospect of a rate hike at their September 20-21 meeting if data continues to show a buoyant labor market. Meanwhile, market participants say a payrolls figure below 170,000 would likely see bond yields ease back amid diminished bets on that rate hike. A slew of other U.S. economic data — from factory orders to the trade balance — will also be released this morning, setting the stage for a busy trading day.
Oil halted four days of declines as Vladimir Putin said he would like Russia and OPEC to clinch a deal to freeze supply, during a wide-ranging interview with Bloomberg News. A barrel of West Texas Intermediate crude for October delivery traded up 0.79 percent to $43.50 at 6:26 a.m. ET. The Russian president said he would likely give his backing to a plan to crimp production at the Group of 20 summit in China next week, ahead of OPEC talks in Algiers at the end of September. In the interview with Bloomberg News Editor-In-Chief John Micklethwait, Putin also said Russia is poised to sell a 19.5 percent stake in Rosneft PJSC, the country’s largest listed oil producer, possibly as early as this year. He also struck a conciliatory tone ahead of talks with Japanese Prime Minister Shinzo Abe at the two-day Eastern Economic Forum in Vladivostok, as the two nations seek to resolve a territorial dispute over the Kuril Islands.
Markets swing ahead U.S. jobs data
Overnight in Asia stocks traded in a narrow range, with MSCI Asia-Pacific Index closing up 0.5 percent. Europe's Stoxx 600 Index added 0.67 percent as of 06:44 a.m. in New York, while the dollar advanced, and 10-Year U.S. Treasury yields rose 1.31 percent as of 7:00 a.m., ahead of the key U.S. payrolls data.
Euro area prices
Producer prices in the euro area rose 0.1 percent in July — the lowest monthly reading since April — marking a year-on-year fall of 2.8 percent, after a 0.8 percent rise June, according to Eurostat. The output data underscore the ECB's battle to generate inflationary pressures in the single-currency bloc, after disappointing headline consumer inflation data for August.
European Union ministers begin a two-day meeting in Bratislava, Slovakia, with the fallout from Brexit likely to be high on the agenda. Global banks are calling for an interim agreement that would preserve their access to the single-market, beyond the end of the two years of official negotiations.
What we've been reading
This is what's caught our eye over the last 24 hours.
- Elon Musk had a bad, terrible, awful, dreadful $779 million day.
- Putin wades into the U.S. election.
- It's M&A with Chinese characteristics.
- Here comes the age-old battle between the Fed and emerging-market investors.
- A few thoughts ahead of the U.S. employment report.
- The Cold War powers of the United States and the USSR have more in common with modern-day asset managers than you think.
- An economist sizes up the likely impact of the deadly earthquake on Italy's economy.