US pre-open: Futures point to flat start after strong gains

(Sharecast News) - US stocks were expected to pause on Thursday after strong gains the previous session, with investors turning cautious ahead of the all-important non-farm payrolls data. Futures were pointing to falls of just 0.1% in pre-market trade.

Stocks put in a decent performance on Wednesday on the back of weaker-than-expected ADP labour-market data and ISM non-manufacturing stats, causing US Treasury yields to pull back from their highest levels since 2007.

Meanwhile, oil prices tanked, with Brent finishing down more than 5% to $85.81 a barrel as a result on demand concerns, providing some optimism that inflationary pressures may soon begin to ease.

On Thursday, the 10-year US Treasury yield was down a further 1.8 basis points at 4.719%, having touched a 16-year high of 4.887% on Wednesday morning after Tuesday's JOLTS survey pointed to a strengthening jobs market.

However, Wednesday's ADP Employment Report showed that just 89,000 jobs were created in September, down from an upwardly revised 180,000 the previous month and well below the 160,000 expected by analysts.

The 'official' non-farm payrolls report, due out on Friday, can often contrast with the ADP figures and is expected to show that job creation eased to 170,000 last month, from 187,000 previously.

The US Dollar Index was pulling back slightly after reaching a fresh 2023 high earlier in the week.

"The combination of economic data and speeches from Fed officials today could trigger more dollar volatility ahead of the highly anticipated non-farm payrolls report on Friday. Financial markets remain highly sensitive to US Treasury yields, and this continues to be reflected through the dollar rally," said Lukman Otunuga, senior market analyst at FXTM.

"A strong-than-expected US jobs report may support the 'higher for longer' expectations around US interest rates, boosting the dollar as a result. However, further evidence of a cooling labour market may support the argument that the Fed is finished with hiking rates this year, weakening the greenback."

Jobless claims data for the week to 29 September will be in focus at 0830 ET and are expected to rise to 210,000 from 204,000 the week before.

Amazon and Microsoft futures were struggling for direction after UK regulator Ofcom requested an antitrust probe from the Competition and Markets Authority over their dominance of the public cloud infrastructure services market.