US equity futures erased a modest rebound from yesterday's 1.8% rout ahead of today's 8:30am jobs report and Powell's 12:30pm speech. As of 8:00am ET, S&P futures were unchanged and well off session highs, while Nasdaq futures rose 0.1%, with Mag 7 names mixed, led by NVDA’s +1.4% pre-market gain after the bullish AVGO (+13%) earnings. Underscoring the growing risk aversion in the markets, stocks failed to stage a rebound even after Trump delayed levies on Mexican and Canadian goods covered by the North American trade deal. Europe's Stoxx 600 falls 0.7% following a broadly weaker session for Asian stocks as Trump’s shifting approach to trade tariffs hampers risk sentiment. Bond yields are lower as is the USD, although off session lows. Commodities are actually higher for once led by oil (WTI +1.6%) and base metals (Aluminum +1.4%; Copper +1.6%). In crypto, Bitcoin slumped after Trump signed an executive order to create a strategic Bitcoin reserve that failed to meet market expectations. Today, we will hear the payroll data at 8:30am ET. Consensus looks for +160k vs. +120k whisper (143k prior); the UR is expected to remain at 4.0% vs. 4.0% prior and Hourly Earnings to print 0.3% vs. 0.5% prior.
In premarket trading, Broadcom (AVGO) shares jumped 11% after the chipmaker reported first-quarter results that beat expectations and gave an outlook that is seen as strong, reassuring investors about the demand prospects for AI-related infrastructure. In sympathy, chip stocks gained: Micron (MU) +1.3%, Applied Materials (AMAT) +1% and AMD +0.5%. Nvidia led gains among the Magnificent Seven stocks (Nvidia +1.4%, Apple -0.3%, Tesla -0.4%, Microsoft -0.3%; Meta, Amazon and Alphabet little changed). Here are other notable premarket movers:
US employers likely added 160,000 jobs last month, showcasing a labor market holding steady in the face of mounting policy uncertainty, according to economists surveyed by Bloomberg, although as UBS notes, the whisper number is well lower, at around 122,000 (our full preview can be found here).
On Thursday, Wall Street failed to stage a rebound even after President Donald Trump delayed levies on Mexican and Canadian goods covered by the North American trade deal. The back-and-forth on tariffs “is creating a lot of uncertainty and that is showing up not only in markets, which have become quite volatile, but also in forward looking leading indicators, such as surveys and purchasing managers indexes,” said Florian Ielpo at Lombard Odier. “For now the hard data remains good, but the soft data is deteriorating, and the question is which one is correct.”
After the jobs report there is another notable highlight: Fed Chair Jerome Powell is slated to speak at a monetary policy forum at 12:30pm.
Bitcoin, meanwhile, sank as much as 5.7% and four other digital tokens that had previously been highlighted by Trump fell at least 3%, as a potential lack of new buying weighed on the market. The executive order signed by Trump indicated that the government wouldn’t use taxpayer money to fund a strategic reserve of the largest digital asset. Instead, the reserve would be capitalized with Bitcoin already owned by the federal government. Here are some of the biggest movers on Friday:
Europe's Stoxx 600 falls 0.7% following a broadly weaker session for Asian stocks as US President Donald Trump’s shifting approach to trade tariffs hampers risk sentiment. Consumer product and travel shares are leading declines in Europe as the euro extends its post-ECB rally, climbing 0.7% to ~$1.0860. While Europe’s stock benchmark retreated on Friday, Germany’s historic shift toward increased spending helped put the euro on track for its best week since 2009. The prospect of more debt issuance hoisted yields on German bonds by the most since 1990 earlier in the week. The rate on 10-year bunds was little changed on Friday at 2.83%.
Asian stocks fell after US President Donald Trump’s whipsaw tariff announcements added uncertainty to global markets, with Japan and Australia leading declines. The MSCI AC Asia Pacific Index slid as much as 1%. Still, the measure is on track to cap its best week since September on positive signals for China from the National People’s Congress. Japan and Australia’s benchmarks dropped the most in the region. Trump’s order to delay tariffs on Mexican and Canadian goods covered by the North American trade agreement is doing little to assuage investors’ concerns on increasing unpredictability in markets. Japan’s export-sensitive electronic stocks, Sony Group and Nintendo, were among the biggest drags on the regional gauge, while US-exposed Macquarie Group also slipped. “Further escalation of trade tensions – such as new tariffs or breakdowns in talks – could spur more market volatility and downside for trade-sensitive stocks,” said Josh Gilbert, a market analyst at eToro in Sydney. “Sectors like autos, aerospace, technology hardware, apparel, and agriculture are especially sensitive.”
In commodities, oil prices advance, with WTI rising 1.4% to $67.30. Spot gold gains $6 to around $2,918/oz. Bitcoin falls 1% to around $89,000 after Trump’s crypto executive order disappointed
Looking at the US event calendar, today's data calendar includes February jobs report (8:30am) and January consumer credit (3pm). Fed speaker slate includes Bowman (10:15am), Williams (10:45am), Kugler (12:20pm, 1pm) and Powell giving keynote speech on the economic outlook (12:30pm).
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A more detailed look at global markets courtesy of Newqsuawk
APAC stocks were mostly lower as the region followed suit to the losses stateside amid growth concerns, tech weakness and tariff uncertainty, while participants digested Chinese trade data and braced for US jobs data. ASX 200 retreated below the 8,000 level with the declines led by tech following the rout in US counterparts and with the top-weighted financial sector also suffering firm losses. Nikkei 225 underperformed and dipped to sub-37,000 territory in early trade with weakness in tech stocks dragging the index lower, while long-term Japanese yields continued to rise. Hang Seng and Shanghai Comp initially bucked the trend despite the weaker-than-expected Exports and Imports data from China, while there were recent support pledges by the nation's central bank, finance and securities heads including PBoC Governor Pan who said they will study and establish new structural policy tools, as well as cut interest rates and banks’ RRR at the appropriate time. However, the benchmarks ultimately succumbed to the broader risk tone.
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European bourses (STOXX 600 -0.8%) began the session entirely in the red, and continued to trundle lower in early morning trade; price action has been relatively choppy, with focus now on US NFP. European sectors hold a strong negative bias. Telecoms is leading today, albeit modestly so; newsflow for the industry has been light aside from EU Defence Commissioner Kubilius saying it is possible to replace Starlink in Ukraine quickly. Consumer Products is the clear underperformer today, with particular weakness in the Luxury after Chinese trade data and Ferragamo results. US equity futures are modestly firmer footing; the lift in sentiment today could be attributed to the strong Broadcom results; Co. shares are up 12% in pre-market trade after reporting strong AI-demand in Q1, where profits and sales topped expectations. The highlight of the day is the US jobs report for February, where the pace of payroll additions is seen at 160k (vs 143k in January), the jobless rate is seen unchanged at 4.0%, while average earnings are seen unchanged at 41% Y/Y. Tesla (TSLA) added to "best ideas list" at Wedbush.
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DB's Jim Reid concludes the overnight wrap
Welcome to the end of what has been a tumultuous week for markets, as I step in for Jim who should be in the air just south of Greenland when this hits your mailboxes. Fierce cold winds were again blowing in US equity markets yesterday, with ongoing trade policy volatility sending the S&P 500 (-1.78%) to its worst day of 2025 for a second time this week. This came even as President Trump announced a tariff delay for USMCA-compliant goods coming from Mexico and then, later in the day, from Canada. Over in Europe, it was a quieter session, with the ECB delivering its fifth consecutive 25bps cut, but leaving open the possibility of a pause, while longer-dated yields continued to grind higher after their historical rise the previous day.
Kicking off with tariffs, yesterday President Trump signed orders delaying until April 2 tariffs on goods from Mexico and Canada that meet USMCA requirements, which should exempt about half of the goods affected by the new 25% tariffs. So a sizeable but partial rollback, though the share of exempt goods might rise as companies seek to adjust to the new rules. The coverage under USMCA trade agreement, which was renegotiated in President Trump’s first term, relates mostly to rules of origin requirements, so the partial exemption could be seen as addressing concerns over re-imports from third countries. Still, with this being a delay rather than a lasting exemption and with reciprocal tariffs also expected to be announced after April 2, this leaves plenty of lingering tariff uncertainty. The trade rhetoric remained tense vis-à-vis Canada in particular, with Canada’s outgoing Prime Minister Trudeau saying earlier in the day that we will be "in a trade war that was launched by the United States for the foreseeable future.” By contrast, President Trump made more conciliatory comments towards Mexico President Sheinbaum, who said later on that her country would “review the tariffs that we have with China”.
The ongoing uncertainty dragged on equities, as the S&P 500 (-1.78%) fell back to levels seen before the US election. In another volatile session, the index traded -1.65% lower early on before recovering to only -0.5% after comments from Commerce Secretary Lutnick that a USMCA-compliant delay was likely, but sentiment then soured again after the move was confirmed as the noisy policy signals seemed to add to the risk-off tone. In fact, yesterday marked the sixth session in a row that the S&P 500 moved more than 1% in either direction, the longest such run since November 2020. Reflecting this volatility, the VIX rose to a new YTD high (+2.94pts to 24.87). Underperformance by tech stocks saw the NASDAQ (-2.64%) join the Magnificent 7 (-2.89%) in technical correction territory, with the index down -10.43% from its mid-December high. For the Mag-7 the decline was led by slumps for Nvidia (-5.74%) and Tesla (-5.61%), with the two companies now down -26% and -45% from their recent peaks.
Amid the risk-off tone, rates markets moved to again price a full three Fed cuts by the December meeting (+5.9bps to 76bps). In turn, short-dated Treasuries rallied, with 2yr yield down -4.6bps to 3.96%, while the 10yr yield (-0.1bps) was little changed at 4.28%. These rate moves came despite mostly patient commentary from Fed officials. Philadelphia Fed President Harker said he is growing more concerned that the slowing in inflation “is at risk”. Fed Governor Waller viewed a March cut as unlikely but saw room for two, or possibly three, rate cuts this year. And later on, Atlanta Fed President Bostic said that when it comes to policy of the new administration he would be “surprised if we got a lot of clarity before the late spring into summer”. Treasury yields are trading another 2-3bps lower overnight as I type.
Looking forward to today, the main event is the US jobs report, which should get even greater attention given the recent softening in US data. Our US economists expect payrolls to gain +160k in February, up from 143k in January. They see the unemployment rate staying at 4.0% but hourly earnings growth returning to +0.3% from +0.5% in January. Ahead of the payrolls print, yesterday weekly jobless claims sent a fairly upbeat signal on the US labour market. Initial claims fell to 221k (vs 233k expected) in the week ending March 1, reversing an earlier spike, though continuing claims for the prior week surprised to the upside (1897k vs 1874k expected).
Back to yesterday and in Europe, the main story was the ECB rates decision, which delivered another 25bps cut bringing the deposit rate to 2.50%, with 150bps of cuts now delivered since last June. But the cut was accompanied by a few hawkish tweaks. The policy statement noted that the policy stance has become “meaningfully less restrictive”, with President Lagarde no longer emphasizing a lower “direction of travel” on rates and acknowledging that a pause at the next meeting in late April was an option. More generally, uncertainty was the dominant word of the day, with Lagarde stressing a data-dependent meeting-by-meeting policy approach. Later on, Bloomberg reported that ECB officials were preparing for tough talks over whether to cut at the next meeting. Our European economists see another rate cut in April as more likely than not, based on an assumption of a shock from US tariffs on Europe in early April. Notably, even as the ECB’s GDP projections were downgraded yesterday, they have not yet incorporated any US tariffs on Europe. See our economists’ full reaction here.
Rates markets initially took a hawkish read on the ECB’s decision, with overnight index swaps for end-2025 rising by around +7bps by the end of Largarde’s press conference but this move reversed later on, with December OIS pricing down -1.7bps on the day by the close. European government bond curves steepened. 2yr bund yields were largely stable (-0.4bps) but 10yr bund yields (+4.1bps) continued to grind higher after Wednesday’s historic sell-off, reaching their highest level since October 2023. 10yr OATs (+4.9bps) and BTPs (+5.8bps) underperformed, but in the UK 10yr gilts rallied (-2.7bps).
European equities had a mixed session with the Stoxx 600 trading lower for most of the day but largely recovering by the close (-0.03%). In Germany, the DAX (+1.47%) continued Wednesday’s rebound to close at a new all-time high, with the more friendly tariff headlines also helping the Stoxx Automobiles & Parts index rise +2.13% on the day. Italy’s FTSE MIB (+0.68%) and France CAC (+0.29%) posted more modest gains, while in the UK the FTSE 100 (-0.83%) saw a third consecutive decline.
The other major event in Europe was an EU summit on defence and Ukraine. EU leaders endorsed Commission proposals to temporarily exempt defence spending from fiscal rules, to work on a proposed EUR 150bn fund for defence loans for member states and to explore long-term reform of fiscal rules that had been proposed by Germany.However, Hungary’s Orban blocked a full EU-27 statement on Ukraine and the summit failed to deliver a new military aid package for Ukraine that had been floated earlier. Separately, we saw reports that senior US officials plan to meet Ukrainian counterparts in Saudi Arabia next week, with Bloomberg reporting that Washington wants to link the proposed US-Ukraine minerals deal to demands for Kyiv to commit to a quick ceasefire with Russia.
This morning in Asia equity markets are mirroring Wall Street’s overnight slump. Across the region, the Nikkei (-2.22%) is leading the losses, with the KOSPI (-0.31%) seeing a more modest decline, while the Hang Seng (+0.85%) is bucking the negative trend. Outside of Asia, US equity futures for both the S&P 500 (+0.26%) and NASDAQ 100 (+0.45%) are higher overnight. In FX, the Japanese yen (+0.26%) remains on the front foot trading at 147.60, its lowest level since early October against a broadly weaker US dollar and supported by increasing expectations for more BOJ rate hikes.
Early morning data showed China’s export growth slowing more than expected, increasing by just +2.3% y/y (vs +5.9% expected) in the January-February period, marking the slowest growth since April last year. At the same time, imports surprised markets by declining -8.4% y/y in the first two months of 2025 (vs +1.0% expected), the sharpest fall since July 2023.
In other overnight news, cryptocurrencies are lower amid news that a Strategic Bitcoin Reserve and a stockpile of other digital assets established by President Trump’s executive order yesterday evening will be capitalized by forfeited assets already owned by the federal government rather than any new government funding. As I type, Bitcoin is down -1.83%, though it has narrowed its losses after trading -5.7% lower.
Turning to the day ahead, the US payrolls release for February will be the main event on the data side, with Canada also releasing its own jobs report. In Europe, Germany January factory order and France January trade balance data are due. An array of Fed speakers scheduled, including Chair Powell on the economic outlook, as well as speeches by including Bowman, Williams and Kugler.