Asian Markets Edge Up as Traders Hold Breath for U.S. Jobs Data – Will Friday Deliver fireworks or Fizzle?

Asian equities inched higher today—barely mustering a pulse—as the market's entire nervous system now hinges on Friday's U.S. employment report. Traders globally are treating this like Wall Street's version of a dopamine hit: they know it might be bad for them long-term, but they can't look away.

Meanwhile, crypto markets yawned at the sideways action, with Bitcoin continuing its usual routine of ignoring traditional finance's obsession with macro data. Because when you're decentralized, who needs job reports?

One cynical take? The jobs number will probably get revised next month anyway—just like every other 'earth-shattering' economic data point that analysts pretend moves markets until it doesn't.

Europe futures Rise while U.S treasury yields slip and dollar drops to 3-year low

In Europe, futures from IG pointed to a stronger open. FTSE 100 up 0.3% at 8,799; DAX up 0.2% at 23,836; CAC 40 up 0.2% at 7,757; and FTSE MIB up 0.15% at 39,926.

On Wednesday, UK bond yields and share prices fell after Finance Minister Rachel Reeves became emotional in Parliament during a welfare debate. Officials said she was dealing with a personal issue, and Prime Minister Keir Starmer expressed his support.

All eyes are on Friday’s jobs numbers, widely viewed as the key market mover ahead of the Fed’s next decision. “These labor market indicators warn of the risk that the unemployment rate could spike to 4.4%, the highest since October 2021,” said Tony Sycamore, analyst at IG. “This would quickly increase the probability of a July Fed rate cut to around 70%.”

Despite that, futures put only a 25% chance on a cut in July. The Fed has kept borrowing costs unchanged all year, drawing criticism from President Trump, who wants rates reduced from the current 4.25 – 4.50 percent range down to 1%.

In bond markets, traders were on edge before the jobs data. The yield on 10-year Treasuries dipped two basis points to 4.265%, while the two-year note fell to 3.77%. The dollar also weakened, sliding to the lowest point against major currencies in more than 3 years amid concerns about Fed independence.

Currency markets saw the euro nudge up 0.1% to $1.1807, near Tuesday’s four-year peak of $1.1829, while sterling recovered 0.8% of its recent losses. Gilt yields jumped 23 basis points once, marking the largest single-day rise since 2022, October.

In commodities, oil prices eased after a 3% rise overnight on news Iran stopped cooperating with a UN nuclear watchdog. U.S. crude fell 0.4% to $67.20 a barrel, and Brent dipped 0.4% to $68.84.

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