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U.S. futures track lower ahead of jobs report; oil tumbles 2%

Published 04/01/2016, 07:12 AM
U.S. futures move down ahead of NFP; oil loses 2% on supply glut worries
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Investing.com – Wall Street futures registered small losses while waiting primarily for the publication of the U.S. monthly jobs data, along with a string of other economic releases, and while oil tumbled on decreased hopes for a production freeze to be agreed at the April 17 meeting of major oil producers.

The blue-chip Dow futures fell 54 points, or 0.31%, by 11:09AM GMT, or 7:09AM ET, the S&P 500 futures dropped 8 points, or 0.37%, while the tech-heavy Nasdaq 100 futures lost 20 points, or 0.46%.

Market participants were eyeing the release of U.S. nonfarm payrolls and unemployment data at 12:30GMT, or 8:30AM ET on Friday, for further indications on the strength of the job market.

Thursday saw initial jobless claims mark its 55th consecutive read below 300,000, the level generally associated with a firming labor market and its longest stretch since 1973, along with the employment component of the Chicago PMI reaching its highest level since April 2015.

With that positive data in the background, experts are expecting Friday's U.S. nonfarm payrolls report (NFP) to show jobs growth of 205,000 in March, the unemployment rate is forecast to hold steady at 4.9%, while average hourly earnings are expected to rise 0.2%.

However, the Credit Suisse (SIX:CSGN) director of economic research Dana Soporta warned CNBC that there could be a downward surprise.

“In seven of the last eight years, March payrolls have come in on average 45,000 lower than the consensus median”, she explained. Her own forecast was for a reading of 190,000.

While waiting for the NFP report, oil prices tumbled 2% on Friday after the deputy crown prince of Saudi Arabia Mohammed bin Salman assured Bloomberg that the kingdom would only freeze its production if Iran also did so.

In other news, analysts raised their average 2016 forecast for Brent crude by $0.80 to $40.90 a barrel in the latest Reuters’ survey.

OPEC was also reportedly planning to put two proposals on the table for the April 17 meeting in Doha that will reduce the oil supply cut without requiring production cuts or freezes.

Later on Friday, investors will digest the Baker Hughes data on U.S. rig count after the prior week’s data saw the lowest number since November 2009. The active rig count acts as a leading indicator of demand for oil products.

In the meantime, U.S. crude futures fell 2.24% to $37.48 by 11:02AM GMT, or 7:02AM ET, while Brent oil lost 2.21% to $39.44.

On the macro front, and apart from the aforementioned Employment Report, traders will also focus on ISM manufacturing for March, February construction spending, and the revision to the Michigan consumer sentiment for March which will all be released at 14:00GMT, or 10:00AM ET.

Furthermore, Cleveland Fed president Loretta Mester will give a speech to the New York Association for Business Economics scheduled for 17:00GMT, or 13:00ET.

In company news, BlackBerry Ltd (NASDAQ:BBRY) will report quarterly earnings.

As Yahoo! Inc (NASDAQ:YHOO) continued to struggle with its turnaround effort, the Internet portal lost another senior exec with the departure of its senior vice president Sandy Gould who oversees talent acquisition and development.

Automakers will also be reporting their total U.S. vehicle sales throughout the day.

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