Good morning & Happy Friday. Jobs data, terrorist financing allegations and bad news for FC Barcelona. Here’s what’s moving markets.
July Jump
In the U.S. nonfarm payrolls report for July, economists are forecasting 858,000 additions, the most since last August, while the latest “whisper number” among traders points to 897,000 additions. The jump may be distorted by unusually low school-related layoffs amid hybrid and remote learning situations, Bloomberg economists say. As a result, the composition of the July gain across private services, goods and government payrolls will be of more interest than usual. Federal Reserve officials will scour the report as they look for the right time to taper quantitative easing.
The Pen is Mighty
Another Chinese tech sector has been hit by state media calls for regulation. This time, a People’s Daily editorial called for tighter regulation of video services. Shares of Kuaishou, the owner of a Chinese app seeking to rival TikTok, extended their declines in Hong Kong after the editorial’s publication. Kuaishou has been battered by a retreat from the U.S., where it’s decided to shut down its TikTok clone Zynn. TikTok owner ByteDance is not listed, having put its IPO plans on hold amid the regulatory heat.
Messi Out
Superstar player Lionel Messi will not stay with FC Barcelona, according to a statement from the team. The Argentine soccer virtuoso first admitted a year ago that he’s been wanting to leave the club ``all year,’’ but was eventually forced to stay due to contractual terms. Messi isn’t planning to challenge the club's decision in court and drag out a legal dispute, he said.
`Laundromat’ Accusations
There’s fresh U.S. legal trouble for European banks. Deutsche Bank, Standard Chartered and Danske were sued by the families of Americans killed and wounded during the war in Afghanistan who claim they “knowingly facilitated transfers of millions” of dollars that provided aid to terrorists in the region. The banks and two money transmitters functioned as “laundromats,” allowing terrorist financiers to secretly move money and evade detection, according to the lawsuit. Deutsche Bank and Standard Chartered declined to comment. A call to Danske Bank after business hours wasn’t immediately returned.
Coming Up…
European stock futures are pointing down as Asian stocks fell amid fresh outbreaks of Covid-19, as China imposed new travel restrictions. It’s another busy day of earnings in Europe, where Maersk, Allianz, Covestro, ING and LSE are among the highlights on Friday. It’s a quieter day in the U.S., with Dominion Energy among the biggest firms reporting. Of more interest will be the U.S. jobs report for July, which is expected to show another strong month hiring. And the Olympics enters the home stretch ahead of the closing ceremony on Sunday. The spectator-free event has largely passed without major disruption from the pandemic, despite rising cases in host city Tokyo.
What We’ve Been Reading
This is what’s caught our eye over the past 24 hours.
And finally, here's what Cormac Mullen is interested in this morning
The world’s stockpile of negative-yielding debt is swelling again in a sign that demand for havens is just as intense as that for riskier assets. The market value of the Bloomberg Barclays Global Negative Yielding Debt Index was just under $17 trillion on Friday, up from a low of $12 trillion in May. The yield-to-worst on the gauge has fallen to minus 0.33%, its lowest this year. This week, Japan’s benchmark 10-year yield fell to zero for the first time in 2021 after the central bank’s debt-purchase operation signaled there was strong demand for the bonds from investors. With inflation also set to drop below zero again, investors aren't likely to face any hawkish action from the Bank of Japan any time soon. Elsewhere, worries about the global economic recovery and concern about the relentless spread of the delta variant has boosted investor interest in haven assets. The record size of the negative-yielding gauge is $18.4 trillion in December.
Cormac Mullen is a cross-asset reporter and editor for Bloomberg News in Tokyo.
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— With assistance by Cormac Mullen, and Gearoid Reidy
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