Morning Bid: Fed under pressure as layoffs mount

A look at the day ⁠ahead in European ⁠and global ‍markets from Gregor Stuart Hunter.

It's Jobs Friday and there is no jobs report. With non-farm payrolls delayed by a U.S. government shutdown - again - and a ‍selloff on Wall Street going global, markets are anxious.

Traders are increasingly betting ​the Federal Reserve might ease policy at its next meeting, following fresh signs of economic stress in the ​labour market.

A survey from global outplacement firm Challenger, Gray & Christmas showed layoffs announced by U.S. employers surged in January to the highest level for the month in 17 years.

Though pricing implies a strong ​possibility the Fed will remain on hold, funds futures are pricing a 22.7% probability of a 25-basis-point cut at the U.S. central bank's next two-day meeting that ends ​on March 18, compared with a 9.4% chance a day earlier, according to the CME Group's FedWatch tool.

For now, a ‌selloff for global stocks is into its third day and emerging markets are looking shaky. Korean shares led the way after an early ​5% dive in the KOSPI triggered a trading halt.

It ⁠wasn't all bad though, with Japan's Nikkei 225 eking out a 0.6% gain as stocks rally into Sunday's election.

In early European trades, pan-region ‌futures were last down 0.1% and FTSE futures were down 0.6%, though German DAX futures were up 0.1%.

In an indication that investor confidence is still holding up, two of the leading speculative trades ‌of the year both found a bottom during the Asian session.

After plummeting through the $70,000 mark on Thursday, ‌bitcoin has overturned a 4.9% decline to trade 4.2% higher at $65,778.90.

Not to be outdone, after a 19% plunge on Thursday, silver reversed a 10% decline and is now trading up a placid 3.5% at $73.71.

There's ‍been little respite for big tech, however. Amazon shares tumbled 15% in after-hours trading after it projected on Thursday a surge of more ⁠than 50% in capital expenditures this year.

Key developments that could influence markets on Friday:

Earnings announcements:

Philip Morris International, Cboe Global Markets, Societe Generale, Telenor

Economic data:

Germany: Industrial output and trade balance for December

UK: Halifax house prices for January

France: Reserve assets and trade balance for January

Debt auctions:

UK: 1-month, 3-month and 6-month government debt

(Editing by Jacqueline Wong)

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