European Stocks Futures Gain Before US Jobs Data: Markets Wrap

(Bloomberg) -- European and US stock futures gained in line with Asian equities ahead of US jobs data that will identify the path ahead for interest rates. An oil price rally eased after Middle East tensions led to the biggest one-day jump in almost a year.

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Euro Stoxx 50 futures rose 0.2%, and contracts on the S&P 500 advanced 0.1%. Equities in Japan and South Korea rose while markets in mainland China were shut for a holiday. A gauge of Chinese shares in Hong Kong advanced as traders assessed its recent rally’s sustainability and await details of fiscal stimulus and holiday spending.

An index of dollar declined marginally, but is still poised for the biggest weekly gain in nearly six months as traders pared back expectations for aggressive US rate cuts. Treasuries were flat after selling off on Thursday, increasing yields to levels not seen since September.

West Texas Intermediate and Brent crude eased slightly after each rose more than 5% to a one-month high on Thursday. Earlier gains came after puzzling comments from President Joe Biden, who told reporters the US was discussing whether to support potential Israeli strikes against Iranian oil facilities.

Investors are concerned that, should Israel strike critical Iranian assets, the Islamic Republic will lash out and escalate the conflict, dragging in more countries and potentially disrupting global energy shipments. Israel said it bombed more than a dozen Hezbollah targets in Beirut on Thursday.

“The market fear is that there could be supply disruptions coming out of Iran,” said Tai Hui, chief Asia market strategist for JPMorgan Asset Management, on Bloomberg Television. “Demand for oil should remain healthy, but at the same time the risk to the supply side is very much there.”

The initial buying frenzy in Chinese stocks after Beijing’s stimulus is waning as traders take profit and await policy details and holiday spending data for further confidence. Invesco Ltd.’s chief investment officer for Hong Kong and China, Raymond Ma, who predicted double-digit returns in Chinese equities this year, said there are signs the surge has gone too far for some stocks. Still, strategists at HSBC Holdings Plc and BlackRock Inc. are among Wall Street heavyweights turning bullish on the once beaten-down market.