European Stock Futures Rise Amid Payrolls Countdown as Oil Gains 

• Asian stocks little changed, as are U.S. equity futures
• Crude set for worst week in eight months on glut concern

European stock index futures advanced and commodities gained ahead of key American jobs data that’s seen shaping expectations for the timing of the next U.S. interest-rate hike. Oil rose as Russia said it’s confident major producers will agree a deal to freeze output.

Futures on the Euro Stoxx 50 Index added 0.5 percent, while S&P 500 Index contracts and Asian shares were little changed. The won led gains among major currencies as South Korea’s central bank raised its estimate of second-quarter economic growth. The Bloomberg Commodity Index snapped a seven-day losing streak as crude pared its biggest weekly drop since January and most industrial metals advanced. Gold declined this week and U.S. Treasuries rose.

Financial markets are generally subdued as the specter of the jobs data deters investors from making bold bets. Federal Reserve Vice Chairman Stanley Fischer said this week that upcoming economic reports would determine the trajectory of interest-rate increases, having previously highlighted Friday’s payrolls update as being of importance. The figures will come out ahead of this weekend’s Group of 20 summit, with leaders of the world’s biggest economies set to meet in China.

“All eyes are clearly focusing on the nonfarm payrolls data,” said James Woods, a strategist at Rivkin Securities in Sydney. “Even if we do see a strong reading in the payrolls, I don’t really expect that the Fed would act in September. The recent data have been improving and its certainly a good sign but it’s not enough yet to suggest that they have to hike imminently.”

Bets on a September rate increase were reined in on Thursday as a U.S. manufacturing gauge signaled a contraction for the first time in six months. Futures prices indicate a 34 percent chance of a hike this month, down from 42 percent at the end of last week.

Stocks

The MSCI Asia Pacific Index was up 0.1 percent as of 7:20 a.m. London time. Price swings in the gauge over the past three weeks have been the most muted in at least a decade, Bloomberg data show. Benchmarks fell in Australia and Thailand, while Hong Kong’s Hang Seng China Enterprises Index led regional gains with a 1 percent advance.

CK Hutchison Holdings Ltd. jumped as much as 4.3 percent in Hong Kong after receiving European Union approval for a merger involving its Italian assets that will create Italy’s largest wireless provider. Alumina Ltd. climbed the most since March after settling a dispute with its joint-venture partner Alcoa Inc., a move that may spur takeover interest in the Australian company.

Currencies

The Bloomberg Dollar Spot Index gained less than 0.1 percent after slipping 0.4 percent on Thursday, its first loss in a week. U.S. jobs growth slowed to 180,000 last month from 255,000 in July, according to a Bloomberg survey of economists.

“There is potential for markets to whipsaw should we see robust U.S. jobs data tonight,” Sharon Zollner, a senior economist in Auckland at ANZ Bank New Zealand Ltd., said in a client note. “A stronger U.S. labor market isn’t new news for the Fed or its watchers, rather, it is areas such as manufacturing and retail that are currently causing concern, not to mention a generalized lack of inflation. But nonetheless, payrolls data is traditionally a big market mover, so buckle up.”

The won strengthened 0.5 percent, trimming its weekly loss versus the greenback. Bank of Korea said gross domestic product increased 3.3 percent from a year earlier in the three months through June, more than its previous estimate of a 3.2 percent expansion. The yen fell 0.2 percent, extending its weekly slide to 1.6 percent.

Commodities

The Bloomberg Commodity Index rose 0.3 percent.

Crude oil climbed 0.6 percent in New York, after tumbling 9.4 percent over the last four days. U.S. inventories increased last week, keeping supplies at the highest seasonal level in at least three decades, official data showed Wednesday. OPEC members plan to meet this month in Algiers to discuss action to stabilize the market and Saudi Arabia has said a cap on production would be positive. Russian President Vladimir Putin said he’s confident such a deal will be agreed.

Gold was headed for a 0.8 percent weekly loss, having touched a two-month low in the last session. The metal retreated since mid-August as hawkish comments by Fed officials spurred speculation a U.S. rate hike is coming, eroding the appeal of assets such as bullion that don’t bear interest.

Most industrial metals rose on Friday in London, led by a 0.7 percent advance in nickel. Lead, tin and zinc all climbed to levels last seen in the first half of 2015, having been buoyed by data on Thursday that indicated manufacturing is picking up in China, the world’s second-biggest economy.

Bonds

U.S. Treasuries were set for a weekly gain, with the two-year yield having fallen five basis points to 0.79 percent. The rate increased by 14 basis points over the prior two weeks.

“The Fed has kept open the possibility of raising rates in September, but it’s also said that it’s data dependent — so the risk of something disappointing is high,” said Janu Chan, a senior economist at St. George Bank Ltd. in Sydney. “It’s about jobs and inflation. Payrolls is the most important piece of data that will guide the Fed.”

Japan’s 10-year bonds declined this week and their yield rose by 3 1/2 basis points to minus 0.04 percent, set for the highest close since March.

Source: Bloomberg

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