US Futures Rise As Investors Reflect On Inflation Before Key Jobs Data; oil trades near three-year highs ahead of OPEC +

Traders work on the floor of the New York Stock Exchange (NYSE)
  • US futures rose slightly on Monday as investors’ attention turned to key employment data expected later this week.
  • The monthly US employment report acts as a major indicator of the strength of the economic recovery.
  • Oil traded near 2018 levels ahead of this week’s OPEC + policy meeting.
  • See more stories on the Insider business page.

U.S. futures edged higher on Monday as investor attention turned to U.S. non-farm payroll data on Friday, which will give an indication of how steadily the economy is recovering from the pandemic and what what that might mean for the inflation outlook.

Inflation generally increases during periods of sustained and strong economic growth. The latest report showed signs of a labor shortage, which could rekindle concerns that a more prolonged rise in inflation could force the Federal Reserve to reduce its support to the economy more quickly.

Futures on the Nasdaq were last up 0.23% at 4:14 am ET on Monday, while futures on S&P edged up 0.05%. Dow Jones futures fell 0.06%.

Analysts appear to expect the non-farm payroll to increase from 600,000 to 700,000 for June, which, in theory, would keep the unemployment rate below pre-pandemic levels.

“We strongly suspect that the tensions in the job market will persist for several more months as we now enter the summer school vacation season and for most people federal benefits will continue until September.” ING economists noted.

The latest yield on the 10-year US Treasury bill was 1.517%, down 1.9 basis points. Yields fell about 10 basis points over the past month as the Fed helped allay more acute fears of rising inflation with repeated pledges to maintain its current level of support for the economy.

Oil traded near three-year highs on Monday, hitting its highest level since late 2018. Brent crude was last trading at $ 75.20 a barrel, down 0.24%, while that WTI crude was at $ 73.92 a barrel after falling 0.18%.

The OPEC + producer group is meeting this week and will likely discuss sourcing policies, as crude production elsewhere, including the United States, slowly returns to pre-pandemic levels.

“I expect them to ease production cuts further, but not too much. I think Brent crude in the $ 70.00 to $ 80.00 range is the place to be for groupings. their coffers, but don’t disturb Americans too much. ” Jeffrey Halley, senior market analyst for OANDA, said.

European markets relaxed at the start of the session. Frankurt’s DAX was down 0.16% for the last time, while the Euro Stoxx 50 was down 0.51% and London’s FTSE 100 was trading down 0.48%.

A wealth of economic data is expected in Europe this week, including preliminary inflation data for June for major economies such as Germany and France. Inflation in the euro area hit its highest level since November 2018 in May and the European Central Bank expects a substantial jump from 0.9% to 1.6% in the second quarter of 2021.

Asian markets had a mixed start to the week and ended almost flat overall. Tokyo’s Nikkei 225 ended the session down 0.06%, while the Shanghai Composite lost 0.03% and the Hong Kong Hang Seng Index lost 0.04%. The increase in Covid-19 cases has affected markets as lockdown restrictions have been extended and vaccination roll-out continues to be uneven and slow, indicating that post-pandemic economic recovery may be delayed.

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