Investing.com - Here are the top five things you need to know in financial markets on Friday, January 6:
1. Investors eye jobs data
Friday’s main event will arrive when the U.S. Labor Department releases its December nonfarm payrolls report at 8:30AM ET (13:30GMT).
The consensus forecast is that the data will show jobs growth of 175,000, following an increase of 178,000 in November, the unemployment rate is forecast to inch up to 4.7% from 4.6%, while average hourly earnings are expected to rise 0.3% after falling 0.1% a month earlier.
An upbeat employment report will point to an improving economy and support the case for higher interest rates in the coming months, while a weak report would add to uncertainty over the economic outlook and push prospects of tighter monetary policy further off the table.
2. Dollar moves away from 3-week low with focus on yuan
The dollar edged higher against major rivals on Friday, pulling away from a three-week low.
Investors remained cautious ahead of the publication of the U.S. jobs report with expectations for the report to show continued signs of labor market strength.
Forex players were focused on the trade with the offshore yuan as Chinese authorities on Friday ramped up their defense of its currency.
The central bank raised the value of it official guidance rate by the most since the yuan was revalued in 2005.
3. Oil higher on output cut hopes ahead of U.S. drilling activity
Oil prices moved higher on Friday, as market players continued to weigh developments surrounding a landmark agreement between major oil producers to reduce crude output and looked ahead to a measure of production in the U.S.
Thursday's prices rose following reports of supply cuts from Saudi Arabia and Abu Dhabi coming into effect as part of efforts by the Organization of the Petroleum Exporting Countries (OPEC) and other producers to curb a global supply glut this year.
Meanwhile, market players looked ahead to data from Baker Hughes released later on Friday to gauge the increase in U.S. drilling activity.
Last week, the oilfield services provider said that the number of rigs drilling for oil in the U.S. increased by 2 to 525 in what was the ninth straight weekly rise and a level not seen in almost a year.
4. Automakers on watch after Trump tweet
President-elect Donald Trump was back at his twitter account late Thursday, warning firms that products will be taxed heavily if they they are not made in the U.S.
“Toyota Motor said will build a new plant in Baja, Mexico, to build Corolla cars for U.S. NO WAY! Build plant in U.S. or pay big border tax," Trump said in a tweet.
Japanese officials responded with Chief Cabinet Secretary Yoshihide Suga, the chief government spokesman, defending Toyota as a good corporate citizen in the U.S.
Shares in Toyota (T:7203), Nissan (T:7201) and Honda (T:7267) all slumped on the news.
5. Global stocks cautious ahead of U.S. nonfarm payrolls
Global stocks traded lower on Friday on caution ahead of the December employment report stateside.
U.S. futures pointed to a flat to lower open as investors remained reluctant to make large trades ahead of labor market data. At 5:53AM ET (10:53GMT), the blue-chip Dow futures slipped 0.05%, S&P 500 futures dropped 0.06% and the Nasdaq 100 futures gave up 0.01%.
European stocks also traded broadly lower on caution ahead of the U.S. release. The benchmark Euro Stoxx 50 fell 0.3% with Germany's DAX in the red close to the unchanged mark.
Earlier, Asian shares also closed with losses, with the Nikkei 225 under particular pressure from Trump’s tweet attack on Toyota.