Cautious Markets Steady Amid Anticipation of Key Economic Data

Global stocks steadied and the dollar remained strong as investors awaited crucial economic data. The upcoming U.S. ISM manufacturing survey and jobs data could influence Federal Reserve interest rate cuts. Market reactions are expected to be contained despite upcoming event risks.

Global markets showed stability on Tuesday as the dollar held near a two-week high. Investors are adopting a cautious stance ahead of upcoming economic data, particularly the U.S. ISM manufacturing activity survey and Friday's critical jobs data. The results could heavily influence whether the Federal Reserve opts for a 25 or 50 basis point interest rate cut on Sept. 18, as well as determine further rate cuts for the remainder of the year.

European shares were steady with minor declines in U.S. stock futures, while ten-year Treasury yields dropped a basis point to 3.90% as trade resumed in Asia following a U.S. holiday. Economists predict the ISM survey to show marginal improvement while staying in contraction territory at 47.5 in August. Market reactions to unexpected results are expected to be muted given the high event risk ahead.

On Friday, analysts anticipate an increase of 160,000 in U.S. non-farm payrolls and a slight dip in the unemployment rate to 4.2%. Recent job data indicated a significant hiring slowdown, activating a significant response from global markets. This has led investors to double their expectations for Federal Reserve rate cuts. The dollar and yen have both seen movement, with the latter gaining strength due to expectations of continued rate hikes by the Bank of Japan.

(With inputs from agencies.)