US markets are bouncing back from a tough week in pre-market trading implying high expectations that today’s US jobs report will underpin the strength of the US labour market with September’s ISM non-manufacturing report also on deck. Futures suggest the Dow Jones will open 65 points higher at 16,866 with the S&P500 expected to open 7 points higher at 1,953 and the Nasdaq 15 points higher at 4,000. The Dow has retraced almost two thirds of the rally since early August so some have stepped in at 16,700 in the belief that this latest pullback will be as short-lived as others this year and that major US benchmarks will be back at new highs by year-end. Jobless claims and ADP data have been strong this month implying a strong non-farm payrolls report today of over 200k. Consensus is for 215k jobs created with the unemployment rate remaining at 6.1% but that has been thrown slightly into doubt after a weak employment component in the Markit manufacturing PMI this week. The wages element of the data may prove to be the most influential over the direction of future Fed policy; a big pick-up in average hourly earnings beyond 2.1% annually would be an indication the labour market is tightening and could see stocks drop on anticipation of a sooner rate hike. Stock markets could rally if we get the “goldilocks” results; namely around 200k NFP, the unemployment rate around 6% and modest wage growth around 2% YoY; economic expansion needs to support corporate profitability without risking a tighter Fed. The need for gold as an inflation hedge is also at play with the importance of the labour market data towards interest-rate policy. A strong NFP could see gold break below its recent $15 range and challenge $1200 per oz. The ISM Non-Manufacturing report is expected to pull back slightly to 58.5 but still well in expansion territory and shouldn’t be a huge concern in the bigger picture. JP Morgan could be in play today with perhaps more information made public on its data breach which has exposed 76m households and 7m small businesses to a cyber-attack. Wellpoint lifted its share buyback program by $5bn and is expected to open higher RadioShack has reached an agreement for rescue financing to avert bankruptcy from a consortium of investors led by a New-York hedge fund. CMC Markets is an execution only provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.