China surprise lifts mood before US payrolls

A look at the day ahead in European and global markets.

View in Browser Sign up for Reuters newsletters Morning Bid Europe A look at the day ahead in European and global markets By Brigid Riley, Markets Correspondent Data refreshes every time you open this email. For more European market news, click here. Please send any feedback to morningbid@thomsonreuters.com. It's Friday - and the start of a new month - and much-anticipated U.S. nonfarm payrolls finally drop along with a barrage of manufacturing data, to close out a week of mixed economic reports that included an upside surprise from China.   With the U.S. labour market still tight, the Federal Reserve is looking for more indications of cooling, although not too cool as the central bank tries to achieve a soft landing.   Markets have priced in only a one-in-ten chance of a rate hike at the Fed's next meeting in September, but remain uncertain about the rest of the year.   Fed officials haven't been making the prognosticators' job any easier with their increasingly varied comments, although a couple are lined up to speak again on Friday and could offer fresh clues on the mood inside the U.S. central bank. Today's Market News ECB's rate decision in September is still open for debate, De Guindos says Microsoft to unbundle Teams from Office, seeks to avert EU antitrust fine France says Nestle, Unilever, Pepsico among firms not toeing line on prices Employees work on the production line of glass panels for mobile phones at a factory in Zunyi, Guizhou province, China March 6, 2023. cnsphoto via REUTERS/File Photo China bump Meanwhile, a pleasant surprise emerged from China, where a private-sector survey showed factory activity in the world's second-largest economy ticked back into expansive territory.   It's a little too early to celebrate a major shift in recent trends, though, with the property sector and weak household consumption still weighing heavily.   China's economic troubles prompted three of the country's largest banks to cut interest rates on Friday across a range of deposits in an effort to ease some of the pressure on their margins.   China's stock market shook off its recent gloom in the Asian morning, with the blue-chip index's real estate and financial sub-indexes leading the charge.   The parade of PMI data marches on, with surveys due from a host of countries in the euro bloc on Friday.   The euro zone final PMI will be in focus after the survey last month showed manufacturing activity slowing at the fastest pace since the start of the pandemic.   This month's data looks likely to add additional fuel to the will-they-won't-they debate raging over the rate outlook in Europe, with European Central Bank members warning markets on Thursday that the possibility remains for more rate hikes. Key developments that could influence markets on Friday: U.S. August non-farm payrolls and unemployment rate Spain July international tourist arrivals August final PMIs for euro zone, Spain, Switzerland, Italy, France, Germany, Sweden, UK, U.S. Italy final Q2 GDP and July producer prices Fed's Bostic and Mester to speak at separate events Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias. Sponsors are not involved in the creation of newsletters or other Reuters news content. Morning Bid is sent every morning. Think your friend or colleague should know about us? Forward this newsletter to them. They can also sign up here.   Want to stop receiving this newsletter? Unsubscribe here. To manage which newsletters you're signed up for, click here. Reuters Terms & Conditions and Privacy Statement © 2023 Thomson Reuters. All rights reserved. 3 Times Square, New York, NY 10036