By Peter Nurse
Investing.com - European stock markets traded in tight trading ranges Friday as investors await the release of key U.S. employment data, which could influence future Federal Reserve monetary policy.
At 3:45 AM ET (0845 GMT), the DAX in Germany traded 0.1% higher, the CAC 40 in France fell 0.3%, while the U.K.’s FTSE 100 climbed 0.1%.
The main focus Friday will be the publication of U.S. nonfarm payroll data, at 8:30 AM ET (1230 GMT), with hiring likely to have slowed considerably in August to 750,000, after adding 943,000 jobs in July, growing at its fastest pace in nearly a year.
Fed Chair Jerome Powell has made it clear that an improvement in employment numbers is the remaining major prerequisite for the central bank to start reining in its extraordinary monetary stimulus.
However, anecdotal evidence has suggested some slowing of the economy in recent weeks as a fresh wave of the pandemic has gained force. Investors will thus be looking to the jobs data for a better sense of the timing and pace of U.S. tapering, given that the Fed's liquidity creation has been the driving force behind the rally of the last 18 months.
Back in Europe, the final services and composite PMI readings are due out of the Eurozone later Friday, with downgrades likely as the rise of Covid-19 cases weighing on the continent’s economic recovery.
Earlier Friday, data out of China showed the country’s services sector entering contraction territory in August, with the Caixin services purchasing managers’ index falling to 46.7, the lowest level since April 2020.
In corporate news, Berkeley Group (OTC:BKGFY) stock rose 0.5% after the U.K.-based house builder said it expects its full-year profit to be at least as good as last year's. However, it also warned that it was seeing construction cost inflation as well as supply chain and labor market issues.
Covestro (DE:1COV) stock rose 0.5% after the German chemicals maker confirmed that it plans to cut up to 1,700 of its 16,500 jobs worldwide,
Crude prices traded largely unchanged Friday, with traders wary of taking large positions ahead of the key payrolls report.
Still, the oil market is headed for a back-to-back weekly gain, supported by a larger-than-expected reduction in U.S. crude inventories in the run-up to the disruption caused by Hurricane Ida.
These gains came even as the Organisation of Petroleum Exporting Countries and their allies, a group known as OPEC+, confirmed its intention to add another 400,000 barrels per day of supply in October. OPEC raised its demand forecasts for next year at the same time.
By 3:45 AM ET, U.S. crude futures traded 0.1% lower at $69.92 a barrel, while the Brent contract rose 0.1% to $73.09. Both contracts gained around 2% Thursday, putting both on track for small gains this week.
Additionally, gold futures rose 0.1% to $1,813.85/oz, while EUR/USD traded 0.1% higher at 1.1878.