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Dollar strengthens ahead of US jobs report

➤ Dollar firms against majors ahead of U.S. jobs data.

➤ 10-year Treasury yields hover around 3.2%.

➤ Tech shares under pressure after hacking report.

➤ S&P 500 set to open slightly lower.

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The dollar strengthened, 10-year Treasury yields hovered near seven-year highs and global stocks were subdued as investors await the U.S. jobs report for September.

The dollar index, which measures the currency against six major peers, was up 0.08% at $95.827 as of 6:50 a.m. ET. The euro depreciated 0.12% against the dollar, while sterling edged 0.15% higher and the Japanese yen was little changed.

"Recently, wage growth has taken on increased importance than the actual jobs number given concerns about rising levels of inflation and in turn interest rates," so the dollar is likely to respond more to the wage growth numbers, Fawad Razaqzada, technical analyst at Forex.com, said in a research note. "If they show continued strength then rate hike expectations for December will be boosted further, potentially leading to more losses for U.S. government bond prices, and possibly the stock markets."

"This week's break high in U.S. 10-year yields to their highest levels since 2011 could gain further traction if we get a decent U.S. jobs report later today," noted Michael Hewson of CMC Markets UK.

The global bond selloff continued as 10-year Treasury yields added nearly 2 basis points to 3.201%. Economic data and recent comments from U.S. Federal Reserve officials "suggest markets are vastly underestimating the Fed's capacity to tighten," according to Brown Brothers Harriman. "While much depends on the U.S. economic performance in 2019, we think U.S. rates are likely to rise more than what markets are expecting."

German Bunds dipped, with 10-year yields rising 2 basis points to 0.553%, while U.K. Gilts with the same maturity also fell. Yields on 10-year Italian bonds climbed 8 basis points to 3.420% as Economy Minister Giovanni Tria seeks "open and constructive dialogue" with the European Commission about the Italian government's three-year budget plan.

In the equity markets, futures point to a weak opening for Wall Street following losses in Europe and Asia.

Germany's DAX index dropped 0.59%, France's CAC 40 lost 0.34%, and the FTSE 100 shed 0.58%. Unilever PLC shares dipped 0.40% in London and struggled for traction in Amsterdam, where it is listed as Unilever NV, after the Anglo-Dutch consumer goods giant scrapped plans to simplify its dual-headed structure and move its headquarters to the Netherlands.

Japan's Nikkei 225 index lost 0.80%, while Hong Kong's Hang Seng Index dipped 0.19%. ZTE Corp.'s shares tumbled 10.99%, while Lenovo Group Ltd.'s shares shed 15.10% in Hong Kong after Bloomberg Businessweek reported that an improperly inserted microchip compromised U.S.-based Super Micro Computer Inc.'s server motherboards in 2015, though neither company was named in the report.

Overnight, the tech-heavy Nasdaq Composite closed 1.81% lower as the report alleged that Chinese spies had targeted 30 U.S. companies, including Amazon.com Inc. and Apple Inc., in the hardware attack. Apple shares closed down 1.76% yesterday, while Amazon dipped 2.22% and Super Micro plunged 41.12%.

Brent crude oil gained 0.20% to $84.75 per barrel on the ICE Futures Exchange. Gold futures rose 0.38% to $1,206.20 per ounce.

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The day ahead:

8:30 a.m. ET — U.S. employment situation (Econoday consensus: nonfarm payrolls 180,000 monthly; private payrolls 175,000 monthly; average hourly earnings 0.3% monthly; unemployment rate 3.8%)

8:30 a.m. ET — U.S. international trade (Econoday consensus: $53.7 billion deficit)

8:30 a.m. ET — Canada labor force survey (Econoday consensus: employment 16,700; unemployment 5.9%)

8:30 a.m. ET — Canada merchandise trade (Econoday consensus: C$500 million deficit)

12:30 p.m. ET — U.S. Fed's Raphael Bostic speaks

12:30 p.m. ET — U.S. Fed's Robert Kaplan speaks

1 p.m. ET — U.S. Baker-Hughes rig count

3 p.m. ET — U.S. consumer credit (Econoday consensus: $15.0 billion)