Global Markets React to Weak Jobs Data and Steady Services Activity

MSCI's global equities index fell amid weak jobs data and steady services activity. U.S. Treasury yields also dropped, and interest rate-sensitive yields hit a 15-month low. Oil prices rose due to a potential delay in output increases and a drop in U.S. inventories, while gold prices reached their highest levels since August 30.

MSCI's global equities index declined on Thursday as investors assessed weak jobs data and steady services activity. Oil prices rebounded due to a potential delay in output increases and a drop in U.S. inventories, while U.S. Treasury yields fell, with interest rate-sensitive two-year yields hitting a 15-month low after ADP's private sector report showed fewer new jobs than expected.

The data revealed that U.S. private employers hired the fewest workers in 3-1/2 years in August, with July's figures also revised lower, suggesting a sharp labor market slowdown. Investors are now awaiting Friday's non-farm payroll report, a critical indicator for potential rate cuts by the U.S. Federal Reserve this month.

There has been an increase in bets that the Fed might commence its easing cycle with a half percentage point move this month, though traders still assign a 59% probability to a more modest quarter-point cut, according to CME Group's FedWatch tool. However, some economists, like Thomas Simons of Jefferies, argue that the labor market remains solid, and the market might be overestimating the extent of the anticipated easing.

(With inputs from agencies.)