Stocks mixed before US jobs data, oil dips

Stock markets wavered Friday in Europe after gains for most Asian markets, with all eyes on upcoming US jobs data as investors seek clues on whether the Federal Reserve will raise interest rates.

Oil prices eased after surging this week on a fresh escalation of the US-Iran war, though still above US$90 a barrel.

American diesel prices meanwhile reached a record high at US$5.85 a gallon – clouding the outlook on inflation pressures in the world’s biggest economy.

Expectations that rising prices will force central banks worldwide to raise rates have sent government bond yields soaring, though they eased back on Friday.

“Constantly changing interest rate expectations have kept investors on their toes this week,” said Dan Coatsworth, head of markets at AJ Bell.

“Having spent several days in the worry zone amid fears of growing inflationary pressures, markets have ended the week on a calmer note,” he said.

Asian markets largely tracked a Wall Street rally on Thursday, after comments from two Federal Reserve officials cast doubt on an imminent rate hike.

One governing board member, Christopher Waller, said his vote at a policy meeting this month would be guided by inflation data, with a softer reading edging him towards holding rates.

“My decision on the appropriate stance of policy will be heavily influenced by what we learn about August inflation” coming out next week, Waller said.

Officials are trying to balance their desire to get inflation down while ensuring sustained economic growth.

That makes Friday’s release of US non-farm payrolls for August a key indicator, with analysts tabling on around 55,000 new jobs after a surprise drop in July.

On the corporate front, shares in Volkswagen surged more than 6% after the German car giant said management and unions had agreed to cut a total of 100,000 jobs by the end of the decade.

Hit by US tariffs, patchy demand for electric cars and, above all, fierce competition in and from China, Europe’s largest carmaker has been struggling for years.

The job cuts amount to about 15% of Volkswagen’s global workforce.

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