Stocks Edge Higher, Yields Steady Ahead of Jobs Data

By Joe StonorStock futures edged higher and Treasury yields steadied in early European trade, as market sentiment lifts at the beginning of jobs day.U.S. nonfarms payroll data for September due later Friday will help shape volatile expectations for the Federal Reserve's October rate-setting meeting. A stronger-than-forecast print would reinforce the narrative that the U.S. economy is running hot, and would likely sharpen the likelihood of a Fed hike."This is an important one, as the continued data resilience has been a huge factor supporting U.S. risk assets, and it's also given the Fed space to start hiking rates," wrote Deutsche Bank's Jim Reid.Major U.S. indexes were all on track to gain at the open. Futures for the Dow Jones Industrial Average and the S&P 500 futures both rose by around 0.5%, while Nasdaq futures gained 0.8%. Nike's earnings soured the mood, however. Shares in the sports retailer are down 8.9% in premarket trading after the company said declining sales will continue.Treasury yields were little moved, holding close to multi-decade highs but below levels hit earlier this week. Ten-year yields edged down 0.6 basis points to 5.236%, while 30-year yields hovered around 5.620%. Stabilizing Treasurys also benefited from their safe-haven status amid stress in European bonds. The spread between French and German 10-year yields jumped to its highest since 2012, as investors worry about the progress of the French budget.A pullback in oil prices also helped Treasurys, with front-month Brent crude contracts falling 1.1% to $101.14 a barrel. Encouraging signs that Gulf crude exports are recovering weighed on prices, though fears of escalation persist. The U.S. is sending a third aircraft-carrier and additional ships to the region, The Wall street Journal reported. The physical market remains tight as traders continue to watch for a potential U.S. ban on diesel exports.Asian stocks fell back overnight, with Hong Kong's Hang Send dropping 2.6% on its return from a trading break. The Japanese Nikkei 225 fell 0.9%. In Europe, stock indexes were higher after dropping sharply in the last session. The Europe-wide Stoxx 600 is up 0.9%.The dollar pulled back from multi-month highs in the last session, buoying bitcoin, which neared $86,000. Gold contracts held above $4,200 a troy ounce in New York.For the day ahead, jobs data is due at 1230 GMT, while the Fed's Lorie Logan will speak.Write to Joe Stonor at [email protected]