Big, Unexpected Drop in British Pound Unsettles Marketplace; US Jobs Data On Deck

London (Oct 7)  World stock markets were mostly lower Friday, ahead of the key U.S. jobs report that is due out at 8:30 a.m. eastern time. U.S. stock indexes are pointed toward weaker openings when the New York day session begins.

The British pound dropped very sharply and unexpectedly against the U.S.
 dollar Friday and hit another 31-year low, but then quickly recovered over half of its daily loss. Some think the big, sudden drop may have been a computer-generated sell program, or a mistake made by a trader (fat-finger trade). U.K. government bond yields rose sharply following the downdraft in Sterling. The unexplained move by the pound unsettled many in the marketplace. The U.K.'s exit from the European Union has been in the spotlight recently, which is also causing some more uncertainty in the world marketplace.

Traders and investors are awaiting Friday's U.S. jobs report from the Labor Department, which is arguably the most important economic report of the month. The key non-farm payrolls number is expected to be up by 170,000 in September. Look for active markets in the aftermath of the jobs report, especially if it is a miss from market expectations. An upbeat U.S. jobs report Friday would strongly bolster the case for the Federal Reserve raising interest rates yet this year.

World market watchers are keeping an extra close eye on crude oil prices this week. Nymex crude oil futures closed above the key $50-a-barrel level Thursday, which is technically bullish and suggests more upside price action in the near term. There are new reports that Russia may now participate with OPEC in reducing crude oil production levels.

While the rallying oil market has not done much to help raw commodity market bulls this week, a continued uptrend in oil prices would be a significantly bullish overall element for raw commodities.

Other U.S. economic data due for release Friday includes the wholesale trade inventories report, and the consumer installment credit report.

Source: KitcoNews