MARKET WRAPS
Watch For:
EU retail trade; Germany manufacturing orders; no major trading updates expected
Opening Call:
European stock futures were mixed; Asian stock benchmarks were higher. The yield on U.S. Treasurys was little changed, the dollar gained. Oil futures rose and gold fell.
Equities:
Equity futures in Europe were mixed early Friday amid dialed down expectations for a Fed interest-rate hike following dovish remarks from a Fed official.
Federal Reserve governor Christopher Waller's prepared remarks at an event in Washington, D.C. had a more dovish tone than Warsh's speech at Jackson Hole last week.
Waller on Thursday laid out a case for why cooling U.S. inflation could compel him to keep interest rates steady at the Federal Open Market Committee's meeting later this month.
He said that while U.S. inflation is still "meaningfully" above the Fed's 2% target, he's seeing signs of cooling in recent data. He also said the August inflation data will guide his decision on whether to raise or leave rates unchanged at the upcoming meeting.
The big event today is the U.S. jobs report. Sevens Report's Tom Essaye said a "too hot" jobs report was the biggest risk as it would fuel a spike in yields and in turn weigh on stocks.
Forex:
The U.S. dollar gained but may be weighed by reduced Fed rate-hike expectations. "Fed Governor Waller signaled support for holding rates this month if disinflation continues, prompting markets to pare" expectations for a Fed rate increase in September, analysts at CIMB's treasury and markets research said.
Bonds:
U.S. Treasury yields were little changed early Friday. Yields had declined on dovish comments by Fed's Waller, ING's Benjamin Schroeder said.
"All eyes are on the [U.S. nonfarm] payrolls' data after recent Fed commentary has raised the stakes for a hike while making it also more dependent on the final jobs and inflation data ahead of the [Fed's] meeting," the senior rates strategist added.
Energy:
Oil futures gained amid elevated concerns over supply disruptions in the Middle East. "Iran's military said it targeted U.S. bases in Kuwait and the UAE," ANZ Research analysts said, citing state-run Islamic Republic News Agency. Kuwait said it responded to missile and drone threats.
"The tit-for-tat exchange of strikes is raising concerns of a reversal of the recent recovery in oil flowing through the Strait of Hormuz," the analysts added.
Metals:
Gold was lower, trimming earlier gains. The market is awaiting Friday's August employment report and its implications for the Fed's mid-September meeting. Gold traders are also tracking events in the Middle East, where renewed fighting is pushing up oil prices, risking inflation pressures that could in turn lead to higher interest rates.
Iron ore prices were higher. Prices are likely to stay range-bound in the near term, Baocheng Futures analysts said. Elevated ocean freight costs and pre-holiday restocking expectations continue to support iron ore prices, they said, referring to China's week-long national holiday in October. However, high supply could put pressure on prices, they added
TODAY'S TOP HEADLINES
Fed's Waller Hints at September Rate Pause-If August Inflation Plays Along
Federal Reserve Gov. Christopher Waller said Thursday that August inflation data will heavily guide his decision on whether to raise or keep interest rates steady at the upcoming September meeting. But he laid out a compelling case for why cooling inflation could keep him on hold.
In prepared remarks for an event in Washington, D.C. on Thursday, Waller said that while inflation is still "meaningfully" above the Fed's 2% target, he's seeing signs of cooling in recent data. That could push him to vote to keep rates steady at the Federal Open Market Committee meeting that takes place Sept. 15-16.
Why Big Oil Is Wary of Trump's Foray Into Venezuela's Oil Patch
Big Oil has suddenly found itself staring down a new rival in Venezuela: Bigger Oil.
The Trump administration is painting its foray into the Latin American country's oil patch as about more than drilling. Investing in a little-known private operator will give the U.S. the chance, officials argue, to police the corruption that has long troubled the industry there.
A Renewed Threat to Global Grain Supplies: Russia and Ukraine
Just what the world needs right now: Russia and Ukraine bombing the heck out of each other's grain export facilities.
The Black Sea, from Russia's ports at Novorossiysk and Tuapse to Ukraine's Odesa, is the Strait of Hormuz of wheat, only more so. Russia alone accounts for a quarter of global wheat exports in a normal year, Ukraine another 10%, says Matt Darragh, grains and oilseeds analyst at consultant Kpler. This year won't be normal.
Volkswagen Board Approves Doubling Job Cuts, Restructuring in Surprise Move
Volkswagen's supervisory board has approved a plan to double job losses at the automaker to 100,000 and halve its model portfolio as it contends with President Trump's tariffs and intensifying competition from Chinese automakers.
In a surprise move, the company's often-fractious supervisory board unanimously approved Chief Executive Oliver Blume's radical restructuring package, called Future Plan 2030.
Drugmakers Halt Autoimmune Trials After Deaths, Life-Threatening Side Effects
Bristol Myers Squibb told regulators, researchers and patient-advocacy groups in early June that it had paused closely watched drug research because of life-threatening side effects. It took three months for the company to share that with the broader public.
Novartis paused research into a similar therapy last month, which it confirmed only after a Wall Street analyst noticed while scouring a database. It took a week for the company to reveal that three study patients had died.
The 'Deeply Nerdy' Founders Behind Nvidia's $13 Billion Bet on Hugging Face
A trio of nerdy Frenchmen came to New York to build a sassy chatbot for teens. A decade later, their startup has grown into an artificial-intelligence platform that is a pillar of the tech ecosystem, and a linchpin in the strategy of the world's most valuable company.
Nvidia agreed on Thursday to buy their AI company, called Hugging Face, for roughly $13 billion, doubling down on the chipmaker's effort to challenge the dominance of proprietary AI models from OpenAI and Anthropic. With the deal, Nvidia is helping foster the ecosystem Hugging Face built for so-called open-weight AI tools that can be downloaded and tweaked by anyone.
Musk's Boring Co. Pushes Investors for Recruiting, Business Help
Elon Musk's tunneling startup, the Boring Company, made an unusual demand of some investors in its latest funding round: If they wanted in, they had to help build the business.
The company has told some investors that participated in the round that they would have to help recruit Boring employees or assist with business development, such as making introductions to government officials in places where the company might build tunnels, according to people familiar with the matter.
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Expected Major Events for Friday 06:00/SWE: 2Q Balance of Payments
06:00/ROM: Jul Retail trade
06:00/GER: Jul Manufacturing orders
06:00/GER: Jul Manufacturing turnover
06:30/HUN: Jul Retail Sales
07:00/SVK: Jul Internal trade, incl Wholesale & Retail
07:00/SVK: 2Q GDP
07:00/CZE: Jul Retail trade
08:00/UK: Aug UK monthly car registrations figures
08:00/ITA: Jul Retail Sales
08:30/UK: Aug S&P Global UK Construction PMI
08:30/UK: 2Q Bank of England external business statistics
09:00/EU: Jul Retail trade
09:00/LUX: Aug CPI
10:00/IRL: 2Q GDP
10:00/IRL: 2Q Balance of Payments
10:00/IRL: Aug Irish Live Register latest monthly figures
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