Investing.com – US stock futures edge broadly lower ahead of the release of the all-important December nonfarm payrolls report on Friday. The data could have an impact on Federal Reserve interest rate expectations, with many officials at the central bank already signaling some caution around future possible cuts. Elsewhere, Taiwan Semiconductor Manufacturing Co. (TW:) reportedly posts fourth-quarter revenue that tops market estimates.
1. Futures widely lower
US stock futures mostly pointed down on Friday, as investors prepared for the publication of a key employment data later in the session.
By 03:28 ET (08:28 GMT), the contract had dipped by 10 points or 0.2%, had shed 66 points or 0.3%, and were mostly unchanged. Wall Street was closed on Thursday in observance of the funeral of former US President Jimmy Carter.
Highlighting the agenda at the end of the trading week is the nonfarm payrolls report, which is tipped to indicate that the US economy added fewer jobs in December than the preceding month (more below).
A stronger-than-anticipated figure could place more upward pressure on benchmark US 10-year Treasury yields, which have recently touched multi-month highs. As a result, a recently bolstered US dollar may see even more lift and stocks could come under pressure as traders assess a growing term premium and elevated discount rates.
Still, in a note to clients, analysts at ING argued that while payrolls are “pivotal”, the numbers would “need to deviate materially from consensus to have an effect this time around.”
2. Nonfarm payrolls ahead
Economists forecast that the upcoming payrolls report will show that there was a rise of 164,000 roles in December while the unemployment rate is projected to match November’s pace of 4.2%.
Average hourly earnings growth is also expected to cool slightly to 0.3% from the prior reading of 0.4%.
The report will likely face close scrutiny from Federal Reserve policymakers, who have signaled some caution over the potential of future interest rate cuts due in part to recent signs of US economic resilience. Minutes from the Fed’s latest gathering suggested that some members are now more focused on the possible impact of President-elect Donald Trump’s trade policies on inflation.
Overnight, statements from several Fed officials indicated that staff are widely in agreement that there is no rush to roll out further drawdowns in borrowing costs. Markets are now anticipating less than two reductions this year, with the…
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