Markets Hold Steady Ahead of Key Jobs Report Amid Trade and Rate Uncertainty – Europe Market Wrap

Bonds rebounded and shares held steady ahead of Thursday’s nonfarm payrolls report, which is expected to show a slowdown in US hiring against the backdrop of President Donald Trump’s trade war.

US Treasuries rose modestly after Wednesday’s heavy selling, when fiscal concerns about the UK dragged global bonds lower. The yield on 10-year US government debt declined two basis points to 4.26%. The rate on similarly dated gilts fell nine basis points as UK Chancellor of the Exchequer Rachel Reeves received backing from Prime Minister Keir Starmer.

Futures for the S&P 500 were flat on the back of another record high for the US benchmark. The dollar was little changed, while the pound rose 0.2% after suffering Wednesday’s worst performance among major currencies. US stock trading is set to close at 1 p.m. New York time for the July 4 holiday, with bond dealing wrapping up an hour later.

Thursday’s cross-asset moves underscored cautious optimism as traders contend with areas of uncertainty ahead of the employment report that will help identify the path ahead for Federal Reserve interest rates. A weak report may boost Fed doves and support stocks near record highs, while stronger data could complicate the outlook.