Stocks and US Futures Subdued Before Key Jobs Data: Markets Wrap

(Bloomberg) — European stocks and Wall Street equity futures struggled to maintain gains on Friday as traders braced for US job numbers due later that will help chart the path forward for Federal Reserve monetary tightening. The dollar strengthened.

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The Stoxx Europe 600 Index was steady as data showed euro-area inflation returned to single digits for the first time since August. Among individual movers, Shell Plc rose after reporting higher gas-trading earnings. S&P 500 contracts erased an advance to be little changed, while those on the Nasdaq 100 slipped. Tesla Inc. fell in New York premarket trading after making another round of price cuts on its electric vehicles in China.

Treasury 10-year yields steadied after climbing for the first time this week on Thursday following comments from Fed officials. A measure of dollar strength climbed for a second day, while the yen fell to levels not seen in a week, after the Bank of Japan unveiled further unscheduled bond buying to control its yield curve.

Estimates for US nonfarm payroll numbers peg a decline in new jobs added, indicating a cooling in the labor market that would in turn reduce the need for higher interest rates. However, private payrolls figures out on Thursday surpassed estimates and a surprise drop in new claims for unemployment benefits underscored a robust jobs market.

“What the Fed really wants to see is some slack build up in the labor markets, in hopes it can do this gently without creating much of a downturn,” Raghuram Rajan, a former governor of India’s central bank, said on Bloomberg Television. “But it may well be that by the time it seems that it will have raised rates enough, that the momentum takes us down to a mild recession at the very least.”

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Market pricing for US interest rates to peak in June rose to above 5% following comments from Atlanta Fed President Raphael Bostic, who said the central bank still has “much work to do” to tame inflation. St. Louis Fed President James Bullard, who is no longer a voting member of the Federal Open…


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