E-minis are down by about 0.6% currently
Risk sentiment took a bit of a hit earlier in the session but then recovered some of its losses again before moving lower now ahead of the US non-farm payrolls release. Despite the rebound yesterday, markets look to have hit the pause button before digesting the next move today.
With the odds of a Fed rate hike later this month being scaled back, it's good news for equities and that contributed to the rebound overnight. However, much rests on the payrolls data later to either solidify that notion or detract from it.
The key will be to watch out for wages data once again. Average hourly earnings is expected to improve by +0.3% m/m and hold steady at +3.1% y/y. If those figures are met, it's likely to mean that there won't be much to stand in the way of a Fed rate hike on 19 December but focus will be on other economic data to reaffirm that moving forward.
However, if the figures there miss on expectations, I would expect markets to carry on with the moves from overnight and it could be a much needed reprieve for equities before the opening bell.
