US futures drift after blockbuster jobs report, while oil gets a boost from Saudi Arabia's demand outlook
- US stock futures traded little changed following last week's rally on the back of a strong jobs report.
- The head of the Federal Reserve speaks later, and investors will hone in on anything he says about inflation.
US stock futures drifted on Monday, as investors booked profits on last week's rally following robust jobs data, while in Asia, Chinese blue chips gained on the back of resilient trade data and oil rose thanks to an upbeat assessment of demand from Saudi Arabia.
S&P 500 futures were roughly flat, while Nasdaq 100 futures eased by 0.1%. The benchmark indices hit record highs Friday, after data showed the US economy created 531,000 jobs in October. That was well above the 450,000 economists had expected, which helped quash some of the concern about the labor market after September's weak reading.
The next data-driven risk event comes in the form of US inflation data. Economists expect price pressures at the farm and factory gate, as well as for consumers, to have picked up in October. But markets reflect for now that traders and investors trust the Federal Reserve's view that this should prove transitory.
Investors will scour remarks later from Fed Chair Jerome Powell following the central bank's decision last week to taper its monthly asset purchases. Policymakers said they would be patient when it came to raising interest rates, but only as long as inflation does not pick up more aggressively.
"In some respects, the word 'transitory' has almost become meaningless, with central bankers assigning different interpretations to it relative to the incoming data," Michael Hewson, CMC Markets chief markets strategist, said.
"This week's main focus will still be on the risks that rising prices may do to the recovery as we head into year end, with the latest US PPI and CPI numbers for October set to show further increases, on Tuesday and Wednesday," he said.
Core consumer inflation is expected to have risen 0.3% in October, following September's 0.2%. The annual rate is expected to come in at 4.3%, up from 4.0% the previous month and well above the Fed's target of 2%.
The dollar was little changed against a basket of major currencies, trading in sight of last week's 13-month highs. Spurred on by the Fed's pledge to take its time with rate rises, US 10-year Treasury yields hovered near Friday's 6-week lows, trading at 1.481%.
Asia benchmark indices were mixed, with the Nikkei down 0.35%, and the Hang Seng ending 0.4% lower. The Shanghai Composite closed 0.2% higher, following data that showed a record trade surplus.
"A 27.1% rise in October exports does help allay some of the fears around supply chain issues and energy-induced shutdowns," brokers at IG said in a daily note.
In Europe, the Stoxx 600 was broadly unchanged, as losses in bank stocks such as Standard Chartered and Banco Sabadell were partially offset by gains in oil and gas, where Royal Dutch Shell and BP each rallied around 1.3%.
Oil rose after Saudi Arabia said it would almost double its monthly official selling prices for its flagship crude - a sign taken as an expectation for strong demand, even with Brent futures above $80 a barrel.
Brent crude was up 0.9% around $83.50 a barrel, while WTI, which is generally more immune to changes in Saudi selling prices, rose by almost 1% to $82.03.
"The price increments are much higher than market expectations and give a bullish signal on supply tightness," ING commodities strategist Warren Patterson said.
On the crypto front, ethereum's native token hit record highs, buoyed by hopes the US regulator may soon approve the listing of an ether-backed exchange-traded fund. Ether was last up 4.4%, having risen as much as 4.6% to a record $4,762 on Coinbase.