US jobs report is expected to show that 1.2 million jobs were added in August
Wall Street stocks plunged overnight, with the tech sector leading the losses as investors opted to take profit after a spate of record highs. The S&P 500 gave up 3.5%, its biggest loss in three months, and the Nasdaq dipped 5% while the Dow Jones Industrial Average fell 2.8% despite there was no explicit catalyst for the sell-off. In technology shares, Apple plunged 8%, Amazon lost 4.6% and Facebook gave back 3.8%.
Asian markets followed suit on Friday and saw decent losses across the board, falling the most in two weeks following a technology-led plunge on Wall Street. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.6% ahead of United States jobs data due later today. Japan’s Nikkei 225 dropped 1%, Hong Kong’s Hang Seng fell 1.8% and Australia’s ASX 200 shed 2.8%. US stock index futures came under pressure but managed to recover from early-session lows in Asia.
European equities opened lower but turned positive soon as investor sentiment started to improve gradually. According to the latest reports, Spanish banks Bankia and Caixabank are considering a merger to create the biggest lender in Spain with more than €650 billion in total assets. Against this backdrop, Spanish banks drove up the financial sector in the region. Still, investors keep a cautious tone after the recent sell-off and ahead of the US jobs report which is expected to show that 1.2 million jobs were added in August.
Elsewhere, major currency pairs are little changed ahead of the key US release, with the dollar coming under slight selling pressure as traders tend to take profit partially following the recent recovery in USD demand. As such, EURUSD extended intraday gains to the 1.1860 intermediate resistance and could regain the 1.19 handle if US jobs figures disappoint.
Meanwhile, Brent crude regained the upside bias in recent trading after yesterday’s plunge to one-month lows marginally above the $43 handle. Despite the current recovery attempts, the short-term outlook for the oil market remains bearish as there are no positive drivers that could lift the prices higher. However, should the dollar plunge in the aftermath of the US data, Brent may get back above the $45 level before the end of the trading week.
