Strong labor market data make investors nervous ahead of the crucial employment report due later today
Wall Street stocks finished lower overnight, with tech stocks leading losses amid the resurgent inflation fears after the data showed US jobless claims continues to decline last week. Strong labor market data make investors nervous ahead of the crucial employment report due later today. As such, the S&P 500 shed 0.36%, the Dow Jones Industrial Average dropped 0.07%, and the tech-heavy Nasdaq lost 1.03%.
In Asia, equities were mostly on the defensive ahead of the jobs report that could provide more clarity on the economic recovery and the potential for even higher inflation. In this context, the key question for investors is whether it will be temporary or more permanent. Japan’s benchmark Nikkei 225 slipped 0.4%, South Korea’s Kospi lost 0.23%, while Australia’s S&P/ASX 200 inched up 0.49%. Hong Kong’s Hang Seng lost 0.2%, and the Shanghai Composite advanced 0.21%.
European stocks opened marginally higher before turning negative in recent trading. Airlines fell after the U.K. government removed Portugal from its list of safe travel destinations. The Stoxx Europe 600 index edged down 0.02% following the initial gains. On the data front, Eurozone’s April retail sales contracted 3.1% versus -1.5% expected, as sales moderated in April after supposed Easter sales boosted the March numbers.
Meanwhile, the USD index advanced to 3-week highs near 90.60 ahead of NFP data. The buck rallied following better-than-expected results in the US docket and the rebound in US yields. NY Fed J.Williams deemed as premature any modification of the QE programme for the time being, although he did not rule out that scenario in the future. The comments added to the upbeat tone surrounding the greenback, sending the euro to mid-May lows around the 1.2100 figure. A break below this level would bring the 100-DMA at 1.2040 back into market focus.