US Futures Drop Ahead Of Payrolls With Most Markets Closed

US equity futures dipped ahead of today’s payrolls report in a holiday-shortened session, with most cash markets including US stocks closed globally for Good Friday. Sifma, the US financial markets trade association, recommended trading of dollar-denominated bonds during US hours only and a 12pm New York time stop. As of 8:15am, S&P and Nasdaq futures are down 0.2%. Bonds dipped modestly in a holiday-shortened session, the 10Y yield rising 1bp to 4.31%. The dollar was mixed against its Group-of-10 peers.  Oil rallied above $110 a barrel Thursday after Trump issued fresh threats against Iranian infrastructure in an effort to pressure Tehran in negotiations. West Texas Intermediate surged 11%, while the global Brent benchmark settled near $109. The jobs report is the main event on today’s calendar and is due at 8:30am (preview below). 

Iran targeted more sites in Arab Gulf states overnight and into Friday. A container ship signaling French ownership exited the Strait of Hormuz, in what appeared to be the first known transit by a vessel linked to Western Europe since the Iran war all but shuttered the vital waterway.

The main highlight today is the March jobs report (full preview here) which is expected to show a sharp rebound from February weather – and strike -related weakness, with a median forecast for nonfarm payrolls change of 65k; Bloomberg Economics anticipates a 150k rebound

With most of Europe closed for Good Friday, Asian stocks were the only action overnight and rose at the end of another volatile week with a report leading to some optimism that more traffic may be allowed through the Strait of Hormuz. Regional shares followed a recovery in US equities Thursday on news that Iran is drafting a protocol with Oman to monitor traffic through the key waterway, having effectively shut it down since the start of the war. Trading was light in Asia with many key markets shut for holidays. 

MSCI’s benchmark Asia Pacific Index gained 0.7%, with South Korea’s yoyoing Kospi rising 2.7%, and Japan’s Nikkei 225 Stock Average climbing 1.3%. China’s CSI 300 Index reversed an earlier advance to drop 0.9%.

“The improvement in US risk appetite has spilled over” into Asian equities, said Hitoshi Asaoka, chief strategist at Asset Management One Co. in Tokyo. “While oil prices may not fully return to previous levels, if they do partially normalize, there is considerable room for a rebound from a liquidity perspective.”

On Thursday, US stocks started off deep in the red after Trump’s speech late Wednesday did little to reassure investors that the war was nearing a swift resolution, though he had previously set a two-to-three-week timeline for ending the conflict. However, they subsequently soared on some speculation transit through the strait may soon be allowed. The higher close for the S&P 500 on Thursday ran counter to a pattern of late-week selloffs that have hit the market ever since the war began, as nervous investors unwind positions that could be upended if weekend developments threaten to worsen the hit to the global economy.

“While assets gyrate on every new headline, until a clear agreement is achieved with a palatable plan for reopening the Strait, there’ll be downward pressure on economic growth and upward pressure on headline inflation,” said Max Gokhman, deputy CIO, Franklin Templeton Investment Solutions. “That spells indigestion for both equity and bond investors.”

The dollar was mixed against its Group-of-10 peers. US stock-index futures, also open for an abbreviated session, declined, with contracts on the S&P 500 down by 0.3%.

In rates, treasury futures held small losses ahead of the release of March employment data: benchmark yields were higher by 1bp-2bp, with the 10Y yield rising to 4.3128% after ending Treasury little changed having erased oil-led increases amid increasing investor focus on eventual recession risk from the oil shock.

Oil rallied above $110 a barrel Thursday after President Donald Trump issued fresh threats against Iranian infrastructure in an effort to pressure Tehran in negotiations. West Texas Intermediate surged 11%, while the global Brent benchmark settled near $109.

“With US payrolls coming up and a holiday ahead, markets are wary of what could happen over the weekend — especially the first weekend after” Trump’s prime time speech on Wednesday, said Rina Oshimo, a senior strategist at Okasan Securities Co. in Tokyo. “If attacks escalate or retaliations occur, oil prices could remain elevated for longer.”

JPM interest-rate strategists advised taking profit on their March 20 recommendation to buy 2-year Treasuries at 3.891%, which was based on the potential for higher oil prices to stoke recession concerns; the yield ended Thursday just below 3.80%, and the exit call was made because of the risk that strong March employment data will erode expectations for a Fed rate cut this year. Trading of CME interest-rate futures is scheduled to end at 11:15am, and Bloomberg dollar-denominated bond indexes will be priced at 1pm based on prices collecting through 12pm. Oil markets also are closed; oil prices have been a principal driver of bond yields since the surge unleashed by the Feb. 28 start of the US war against Iran, and US benchmark WTI crude futures closed Thursday at the highest level since 2022

The main even on today’s calendar is the March jobs report is expected to show a rebound from February weather- and strike-related weakness, with a median forecast for nonfarm payrolls change of 65k. US economic data calendar also includes March final S&P Global US services and composite PMIs; no Fed speakers are slated.