Here are the top five things you need to know in financial markets on Friday, June 3:
1. Nonfarm payrolls could adjust Fed rate hike plans
All eyes are on the publication of the monthly employment report due out stateside at 12:30GMT, or 8:30AM ET.
Consensus had forecast the unemployment rate to drop to 4.9% after the creation of 164,000 nonfarm payrolls.
A strong reading could bolster speculation that the Federal Reserve (Fed) will move to tighten monetary policy in the following two months.
2. ISM non-manufacturing on tap after mixed global services PMIs
Also affecting the Fed’s monetary policy, market participants looked ahead to the ISM non-manufacturing purchasing managers’ index (PMI) for May.
The U.S. services sector was expected to register a slight drop from the expansion seen in the previous month and the reading will help gauge the strength of the economy as the Fed looks for stronger growth before raising rates.
Elsewhere, China saw May services growth cool to a three-month low, while, to the contrary, the euro zone services PMI hit a three-month high.
Japan, for its part, saw its services sector activity return to a marginal expansion.
Britain's report showed only meager growth as Brexit, or the vote to leave the European Union, fears weighed on sentiment.
3. Fed speakers in the spotlight
Chicago Fed president Charles Evans indicated on Friday that two rate hikes this year would be reasonable if economic data continues to be favorable.
However, Evans downplayed the exact timing, stating that it was “not crucial”, as long as “by the end of this year we’re at just a little under 1%”.
Fed governor Lael Brainard was set to be the first policy maker to speak after the jobs report. She will give a speech on the economic outlook and monetary policy at 16:30GMT, or 12:30ET.
Despite Friday's appearances, markets were looking ahead to the speech from the Fed chair Janet Yellen set for Monday.
4. Oil moves higher despite OPEC inaction
Although the Organization of the Petroleum Exporting Countries (OPEC) failed to create a ceiling for oil production on Thursday which initially tumbled the price of oil, experts are pointing to the fact that the members appeared to be more unified and Saudi Arabia, the world’s largest exporter, seemed complacent to restrain from flooding the markets.
“We will be very gentle in our approach and make sure we don't shock the market in any way,” the country’s energy minister said on Thursday.
Oil recovered after the weekly U.S. crude inventories data was released on Thursday. Though crude stocks fell by a less-than-expected 1.366 million barrels, it contradicted the prior day’s report from American Petroleum Institute’s that saw a 2.35 million barrel build. Also of note, both gasoline inventories and distillate stockpiles fell much more than expected.
The Iranian oil minister indicated on Friday that expectations was for the country to reach production of four million barrels per day, its pre-sanction levels, by the end of 2016.
U.S. crude oil futures edged up 0.06% to $49.20, at 9:52AM GMT, or 5:52AM ET, while Brent oil advanced 0.16% to $50.12.
5. Global stocks mostly higher while waiting for jobs report
Asian markets pocketed gains while waiting for the U.S. employment data. Chinese stocks and Japan both rose 0.5% while Australia led with gains of 0.8%.
European stocks markets were also higher in early trade, recovering from the modest losses in the prior session. At 9:53AM GMT, or 5:53AM ET, the European benchmark Euro Stoxx 50 rose 0.23 %, the DAX gained 0.42%, the CAC 40 traded up 0.40% while London's FTSE 100 advanced 0.90%.
U.S. futures showed more caution, trading flat while waiting for nonfarm payrolls. The Dow Jones Industrial Average futures pointed to a 0.01% gain, S&P 500 futures slipped 0.02%, while the Nasdaq 100 futures indicated a 0.07% decline.