U.S. stocks will open higher Friday as we approach the release of the latest U.S. Nonfarm payrolls, expected to show a U.S. labour market that is having difficulty in creating enough jobs. Sell offs in commodities are still weighing on risk appetite.
S&P 500 Index futures are currently up 0.3 percent ahead of the open.
Stagnating U.S. Nonfarm payrolls may ignite risk off
Today’s main event is U.S. Nonfarm payrolls in April expected (12:30 GMT) to come out at 185K compared to 216K in March. It is a bit worrying that job creation has slowed down and is now even stagnating (see chart below). With the latest weak economic data coming out of the U.S., investors will dump risk if today’s Nonfarm figures disappoint. Today’s job data is also important as we are driving out of earnings season and good economic data needs to take over in order to deliver support for stocks.
Source: Bloomberg
German industrial production surprised supporting stocks
In Europe, the Euro STOXX 50 Index futures are up 0.4 percent driven by gains in Daimler (+1.6%), Siemens (+0.8%) and Bayer (+1.3%) as German stocks have taken the lead following better than expected industrial production in March driven by strong performance in manufacturing. In the U.K., PPI Output in April came in at 5.3 percent year-over-year compared to 5.1 percent estimated by economists ,signalling that inflationary pressures remain at sustained elevated levels.
Further south, Spain delivered some sunshine as the country’s preliminary first quarter GDP figures showed 0.7 percent growth year-over-year, accelerating slightly from 0.6 percent in the fourth quarter 2010 and up from -1.4 percent in the first quarter of 2010. The country’s 10-year bond yields are unchanged at 5.23 percent compared to German yields of 3.17 percent.