Investing.com - Wall Street stock futures pointed to a higher open on Friday as market players waited for the publication of the jobs report with the possibility of an upheaval in current expectations for the Federal Reserve (Fed) to hike rates at their policy announcement next Wednesday.
The blue-chip Dow futures gained 79 points, or 0.37%, by 6:54AM ET (11:54GMT), the S&P 500 futures rose 11 points, or 0.47%, while the tech-heavy Nasdaq 100 futures traded up 21 points, or 0.38%.
All eyes will be the U.S. Labor Department’s release of its February nonfarm payrolls report at 8:30AM ET (13:30GMT) on Friday.
The consensus forecast is that the data will show jobs growth of 200,000, following an increase of 227,000 in January, the unemployment rate is forecast to dip by 0.1% to 4.7%, while average hourly earnings are expected to rise 0.3% after gaining 0.1% a month earlier.
Expectations will be high for the official government data after the ADP’s own monthly report showed Wednesday that hiring had spiked last month with the economy creating no less than 298,000 jobs last month, its strongest reading in nearly 11 years.
Experts widely anticipate the reading to give the green light to the Fed to hike interest rates at their March 15 policy decision announcement, with only a dire report being capable of putting a hold on the continuation of policy tightening.
With a weak reading largely seen as unlikely, some analysts warn that an extremely strong report could shift the balance in the Fed to an even more aggressive stance, opening the door to a less gradual removal of accommodation.
Prior to the release, markets are currently pricing in the chance of a rate hike at the March 15 announcement at approximately 89%, according to Investing.com’s Fed Rate Monitor Tool.
Odds first pass the 50% threshold for a second policy tightening at the July meeting, while the probability that the Fed would comply with their December forecast of three hikes in 2017 stood at around 63%.
The selloff in gold continued on Friday as expectations for a Fed rate hike dampened the appeal of the precious metal.
Friday’s drop took gold back below $1,200, extending this week’s slide to 3%, its biggest weekly drop since November.
The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar in which it is priced.
Gold for April delivery on the Comex division of the New York Mercantile Exchange lost $6.15 cents, or 0.51%, to trade at $1,197.05 by 6:56AM ET (11:56GMT).
The dollar, however, retreated against major rivals on Friday as market players opted to take profit on apparently higher odds for a bearish reaction to the jobs report and after what looked to be the greenback’s fifth straight week of gains and its best run in eight months.
“In the near term it’s going to be quite tough for there to be further dollar strength, given how well priced the Fed meeting is next week, and also just how much the market has priced for the year now as a whole,” experts from Barclays warned.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.10% at 101.88 by 6:58AM ET (11:58GMT).
Crude prices rebounded on Friday after dropping to their lowest in more than three months the session before, pressured by concerns that a global supply glut is proving stubbornly persistent.
The barrel of West Texas Intermediate oil (WTI) fell below $50 on Thursday for the first since mid-December, when OPEC and other producers agreed to cut output.
WTI is on track for a 7% decline this week, the biggest weekly drop since early November. Brent is heading for a 6% fall, also the biggest since early November.
Investors will look ahead to weekly data out late Friday from Baker Hughes to gauge the response from U.S. drillers to what have been higher oil prices due precisely to major producers’ efforts to cut supply.
Last week, the oil services provider’s figures showed oil rigs rose by 7 for the seventh weekly increase in a row. That brought the total count to 609, the most since October 2015.
U.S. crude futures gained 0.61% to $49.58 by 6:58AM ET (11:58GMT), while Brent oil traded up 0.52% to $52.46.