U.S. Futures, Dollar Weaken Before Jobs Data

U.S. equity-index futures dropped with the dollar amid signs economic growth is slowing before payrolls data on Friday. Emerging-market stocks climbed to a one-month high, while oil declined as Iran and world powers extended nuclear talks.

Standard & Poor’s 500 Index futures fell 0.2 percent at 8:10 a.m. in New York, while the Stoxx Europe 600 Index also lost 0.2 percent on the final day of trading this week. The MSCI Emerging Markets Index added 0.9 percent. The Bloomberg Dollar Spot Index declined 0.2 percent. The yield on 10-year Treasuries were little changed at 1.85 percent. Oil in New York slid 2.4 percent to $ 48.87 a barrel.

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Reports showing weaker-than-estimated hiring and manufacturing data on Wednesday bolstered the case to keep interest rates low to support the economy, before the Labor Department’s monthly payrolls on Friday. Iranian Foreign Minister Mohammad Javad Zarif said that while there had been progress in negotiations, no solution had been reached.

“After yesterday’s poor jobs data, investors are taking profits on dollar longs,” said Peter Kinsella, a senior currency strategist at Commerzbank AG in London, referring to bets that asset prices will rise. “It’s a prudent risk management. If we get a poor non-farm payrolls print tomorrow, the poor holiday liquidity means we could squeeze a lot higher in euro/dollar.”

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U.S. employers probably hired fewer workers in March than the previous month, economists said before Friday’s payrolls report. Investors are looking at economic data for clues as to the timing of the Federal Reserve’s first rate increase since 2006.

Buying Protection

S&P 500 E-mini futures signaled the gauge will decline for a third day. The index is little changed on the week and down 2.7 percent from a record last month. With rallies in U.S. stocks falling apart on a daily basis, traders are scooping up protection, pushing the number of bearish options on the S&P 500 to its highest level since October 2008 versus bullish calls.

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While U.S. stock exchanges will be shut for a holiday on Friday, investors will have 45 minutes to react after the Labor Department releases its employment report at 8:30 a.m. New York time.

The Stoxx 600 is heading for a 0.5 percent weekly gain after completing its best first-quarter rally since 1998. Automakers are falling the most among 19 industry groups.

Marks & Spencer Group Plc advanced 5.6 percent after the U.K.’s largest clothing retailer posted its first sales growth for its general-merchandise unit since 2011. Royal KPN NV climbed 1.1 percent after saying it had received interest from several parties for its Belgian mobile-phone business Base.

Market Closures

Markets in Denmark, Iceland and Norway are shut on Thursday, while Sweden has a half day. European markets will be closed for holidays on Friday and Monday.

Emerging-market stocks rose for a fourth day. The ruble advanced 1.2 percent, extending a 1 percent rally on Wednesday.

The Hang Seng China Enterprises Index of mainland shares traded in Hong Kong advanced 1 percent. The Shanghai Composite Index added 0.4 percent to the highest close since March 2008. Shanghai traders now have more than 1 trillion yuan ($ 161 billion) of borrowed cash riding on the world’s highest-flying stock market.

The dollar weakened against all but two of its 16 major counterparts, falling most against the Norwegian krone.

The euro climbed 0.6 percent to $ 1.0826, rising for a second day, and the yen strengthened 0.2 percent to 119.55 per dollar. Australia’s dollar slipped 0.1 percent to 75.93 U.S. cents, hurt by declining iron ore prices.

Election Debates

Implied volatility in the pound against the dollar, a measure of future price swings, declined for a second day before the leaders of seven British political parties take part in a televised debate before the May 7 general election. The gauge for two-month volatility reached the highest since 2011 earlier this week.

France sold 10-year debt at the lowest auction yield on record before the European Central Bank publishes an official account of its March 4-5 policy meeting.

The cost of insuring corporate debt in Europe rose to the highest level in six weeks, with the Markit iTraxx Europe Index of credit-default swaps up 0.5 basis point at 57 basis points, according to data compiled by Bloomberg.

U.S. 10-year notes were little changed after climbing for the past four days, leaving the benchmark Treasuries yield at 1.85 percent.

WTI traded down after rising the most in two months on Wednesday on data that showed the first drop in U.S. oil production since January. Drillers have idled 762 rigs since December to the fewest in four years after prices fell by almost half in 2014. Brent crude fell 2.7 percent to $ 55.88 a barrel in London.

U.K. natural gas for delivery today jumped by the most in five months after an outage at a gas processing plant cut supplies from Norway, Britain’s biggest foreign supplier of the fuel.

More from Bloomberg.com

  • Trade Deficit in U.S. Shrinks to Five-Year Low as Imports Slump
  • Jobless Claims in U.S. Decreased to a Nine-Week Low of 268,000
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