Investing.com - Here are the top five things you need to know in financial markets on Friday, September 7:
1. Jobs report expected to cement September rate hike
All eyes on Friday will be centered on the release of the August employment report at 8:30 AM ET (12:30 GMT).
Forecasts are for the creation of 191,000 nonfarm payrolls last month while the unemployment rate is expected to drop back to an 18-year low of 3.8%.
With all expectations pointing to yet another strong reading for the U.S. labor market, focus will remain on wage inflation which has yet to see a big upward push despite tightening conditions. Annualized average hourly earnings are expected to match July’s 2.7% rise. Wage inflation has remained below the 3.0% generally considered to cause upward price pressure since 2009.
Another solid showing for employment will likely cement market expectations that the Federal Reserve will raise rates by a quarter-point at the September 25-26 meeting.
The probability for another increase in December hovered near 70% early on Friday, according to Investing.com’s Fed Rate Monitor Tool.
2. Trade tension shifts to Japan with China tariffs still on hold
A U.S. public-consultation period ended at midnight ET (4:00 GMT) Friday on the new batch of $200 billion in tariffs on Chinese imports with no word on when they will be implemented. Reports throughout the week suggested that U.S. President Donald Trump wanted to push the levies through as soon as possible, but so far no clear timetable has been presented.
China said Thursday it would retaliate if the U.S. went ahead with the measures as the world’s largest economy.
With China in the background, attention switched to a report that Trump may be preparing to expand his tariff tactics to Japan.
In a conversation with the Wall Street Journal, the U.S. president said he had good relations with Tokyo but warned that things may change: “Of course that will end as soon as I tell them how much they have to pay.”
3. Stocks head lower amid trade tensions
After the Wall Street closed lower a day earlier, with the Nasdaq logging its third straight decline, losses looked likely to continue on Friday as traders remained cautious in a situation marked by global trade worries. At 5:53 AM ET (9:53 GMT), the blue-chip Dow futures fell 64 points, or 0.25%, S&P 500 futures were lost 6 points, or 0.22%, while the Nasdaq 100 futures traded down 22 points, or 0.29%.
Elsewhere, European stocks were mostly lower on Friday as uncertainty over global trade rippled through markets. The European benchmark Stoxx 600 was on track for its worst weekly decline since March as the escalating trade dispute between the U.S. and China, as well as weakness in emerging markets, dampened investors' appetite for risk.
Asian stocks in general hit a 14-month low earlier on Friday. Of particular note, after hitting a decade high last week, concern over emerging markets contagion and worries over international trade sent Australia’s S&P/ASX 200 index to its largest weekly decline since February and its worst losing streak in more than two years.
4. Fed speakers on watch
Investors will monitor remarks from the several Federal Reserve policymakers on Friday, with particular attention to any comments on the U.S. employment report.
Coinciding with the release of the report, Boston Fed president Eric Rosengren is scheduled to give a speech at 8:30 AM ET (12:30 GMT) as he kicks off the bank’s conference titled “What Are the Consequences of Long Spells of Low Interest Rates?”
At 9:00 AM (13:00 GMT), Cleveland Fed president Loretta Mester will lead a panel discussion at the conference on "Reality Check from the Markets".
Separately, Dallas Fed chief Robert Kaplan will participate in a moderated Q&A ahead of a separate conference on energy and the economy.
5. Oil inches up ahead of U.S. rig count data
Oil bounced back on Friday after three straight days of declines. Data released Thursday revealed that a large draw in U.S. crude inventories was overshadowed by an increase in gas and distillate prices which analysts said reflected a weak summer driving season.
Market players will also focus Friday on weekly rig count data for further signals on U.S. output levels.
Last week’s data showed that the U.S. rig count, an early indicator of future output, rose by 2 to 862 last week, according to oilfield services firm Baker Hughes.