Global equities were set to extend their weakness as traders awaited this week’s US payrolls data to gauge the extent of the Federal Reserve’s easing.
The Euro Stoxx 50 futures fell 0.2% while US equity contracts also dipped. The MSCI Asia Pacific Index erased most of its 0.8% gain, led by declines in Japan and Hong Kong.
Treasury yields climbed after the 10-year rate dropped eight basis points in the prior session, as a slowdown in the US labor market bolstered bets on steep rate cuts by the Fed. An index of dollar strength steadied after weakening by 0.3% on Wednesday.
The yen strengthened following an increase in Japan’s real wages that supported the case for the Bank of Japan’s rate hike. Traders are back in wait-and-see mode ahead of the US payrolls report due Friday, one of the most important data points before the Fed’s decision later this month.
Financial markets have displayed outsized reactions to US economic data as focus shifts to the risk of a recession. Skepticism over the artificial intelligence hype has also hurt risk assets, with Nvidia Corp. seeing its worst two-day plunge since October 2022.
