European and US stock futures edged lower in subdued trading on Friday, as investors took a cautious stance ahead of the release of critical US jobs data, which will help shape expectations for future interest rate movements. The Euro Stoxx 50 futures fell by 0.3%, while S&P 500 futures dropped 0.2%. Meanwhile, Asian markets saw a positive surge, with mainland China stocks rising and Hong Kong’s technology sector nearing a technical bull market.
Treasury yields remained steady following modest declines across the yield curve on Thursday, while the US dollar index inched up.
The muted market movements reflect uncertainty as investors await the US nonfarm payrolls report, due later in the day. This jobs data is set to refocus attention on the economy, shifting away from earlier tariff-related market volatility. A weaker-than-expected payroll figure could fuel expectations of additional Federal Reserve rate cuts, while a stronger-than-expected number might dampen those hopes.
Amy Xie Patrick, head of income strategies at Pendal Group, told Bloomberg Television that the market is likely to remain directionless for the time being. She emphasized the importance of maintaining high-quality assets and staying flexible in investment strategies.
In Asia, Hong Kong’s Hang Seng Tech Index rose as much as 2.9%, pushing the benchmark more than 20% higher from its January low—officially entering bull market territory. The rally was sparked by growing investor interest in China’s internet companies, fueled by the launch of a low-cost AI model from the startup DeepSeek.
“The Hang Seng and MSCI China have a higher concentration of stocks that are expected to benefit from the popularity of DeepSeek,” explained Chetan Seth, Asia Pacific equity strategist at Nomura Holdings.
Wall Street is also focusing on Friday’s jobs report, which is expected to show the addition of 175,000 jobs to the US economy. Additional data released Thursday showed a slight rise in initial jobless claims, while labor productivity remained strong. Alongside the jobs numbers, market participants will be closely monitoring revisions to previous job growth data, which are expected to be significant but possibly not as severe as initially feared.
Gaurav Mallik, chief investment officer at Pallas Capital Advisors, noted that as long as the job growth falls within the range of 170,000 to 200,000 new roles, markets are likely to absorb the data with minimal volatility. However, a significantly higher or lower number could spark concerns about the labor market’s health and its implications for interest rate policies.
Focus on Revisions
Every January, the US Bureau of Labor Statistics revises its employment data for the previous 12 months, and this year’s revisions are attracting heightened attention. Preliminary estimates suggest a downward revision of 818,000 jobs, the largest such adjustment since 2009.
Federal Reserve Chair Jerome Powell reiterated the central bank’s focus on inflation progress, with the Fed seeking sustained evidence that price pressures are moving in the right direction. While traders currently expect the Fed to cut rates, most anticipate this will not happen before mid-year. Treasury yields this week reached their lowest levels for 2025.
The Japanese yen weakened against the dollar on Friday, breaking a five-session winning streak. Analysts noted that hawkish comments from Japanese officials regarding domestic policy rates had earlier supported the yen, but the dollar regained some strength.
In India, the central bank made its first rate cut since 2020, lowering its benchmark interest rate by 25 basis points to 6.25%. Some analysts had anticipated a 50 basis point cut.
Meanwhile, US Treasury Secretary Scott Bessent announced that his department is engaging with major holders of government debt to gauge their views on the federal debt ceiling. He also reiterated his support for a strong dollar and affirmed that there are no plans to change the government’s debt-issuance strategy.
Amazon.com Inc. saw its shares fall in after-hours trading following earnings results that indicated a shortfall in projected profits for the current quarter. The company continues to increase spending on artificial intelligence services, which contributed to the weaker-than-expected results.
In commodities, gold rebounded slightly after retreating from a record high on Thursday, marking its first decline in six sessions. Oil prices also saw a modest uptick after a drop on Thursday, overshadowed by President Trump’s renewed commitment to lower crude prices and tighten sanctions on Iran.
Market Overview:
Stocks:
- S&P 500 futures: -0.1%
- Japan’s Topix: -0.4%
- Hong Kong’s Hang Seng: +0.7%
- Shanghai Composite: +1%
- Euro Stoxx 50 futures: -0.3%
Currencies:
- Bloomberg Dollar Spot Index: +0.1%
- Euro: $1.0375
- Japanese Yen: -0.2% to 151.76 per dollar
- Offshore yuan: unchanged at 7.2937 per dollar
Commodities:
- WTI Crude: +0.4% to $70.89 per barrel
- Spot Gold: +0.2% to $2,863.13 per ounce
Bonds:
- US 10-year Treasury yield: +1 basis point to 4.45%
- Japan 10-year yield: +1.5 basis points to 1.290%
- Australia 10-year yield: +4 basis points to 4.36%
Key Economic Events This Week:
- US nonfarm payrolls and unemployment rate (Friday)
- University of Michigan consumer sentiment (Friday)
- Speeches by Fed’s Michelle Bowman and Adriana Kugler (Friday)
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