Market players await the official US jobs report for March
US stocks tumbled on Thursday, finishing their worst quarter since the start of the pandemic two years ago amid geopolitical tensions surrounding Ukraine and rising inflation that pushes the Fed to hiking rates. Of note, fresh economic data out of the US showed that the PCE index rose 6.4% year-over-year, up from 6.1% in January. The pace far exceeds the Fed’s 2% target and reflects the fastest inflation rate since 1982. The S&P 500 declined 1.57% overnight, taking its loss in the quarter to nearly 5%, the most since March 2020. The Dow Jones and the tech-heavy Nasdaq Composite shed 1.5% each.
In Asia, equities mostly fell as investors stayed cautious ahead of the weekend. The Nikkei 225 dropped 0.56% after the data showed that the headline index for large manufacturers’ sentiment in the Bank of Japan’s quarterly survey came in at 14, a decline from the previous quarter’s reading of 17. Bucking the trend, the Shanghai Composite rose nearly 1% despite the Caixin/Markit manufacturing PMI for March came in at 48.1, the lowest in two years. Now, investors shift their focus to a closely watched monthly US employment report later in the day. The figures could affect expectations regarding the pace of Fed’s rate hikes down the road.
European stock markets opened slightly higher on Friday, with the pan-European Stoxx 600 adding 0.4% in early deals. On the data front, Eurozone’s March final manufacturing PMI came in at 56.5 versus the preliminary estimate of 57.0 while manufacturing output slumped to its weakest in nearly two years. Input price inflation accelerated to a four-month high amid rallying commodity and energy costs. US stock index futures climbed marginally today as market players await the official jobs report for March.
Meanwhile, the dollar extends its rebound across the market, with the USD index trading back above the 98.00 figure, challenging the 98.60 zone ahead of the US March jobs report that would affect dollar dynamics in the near term. Strong figures are expected to push the USD index towards the 99.00 mark on a daily and weekly closing basis. As such, EURUSD slipped from local lows seen around 1.1185 on Thursday to settle around 1.1060 in recent trading. Should the pressure intensify, the pair will derail the 20-DMA, currently at 1.1000.
