TechFlow news: U.S. stock index futures declined as traders awaited nonfarm payroll data, with market expectations pointing to a rebound in August employment and a slight decline in the unemployment rate. S&P 500 futures were down nearly 0.5%, poised for a fourth consecutive day of losses; Nasdaq-100 futures dropped 0.8%, while Dow Jones Industrial Average futures fell nearly 0.3%. Concerns about excessive economic slowdown have driven risk assets lower this week, with the policy-sensitive 2-year Treasury yield dropping 18 basis points since Tuesday.
Swap contracts fully price in a 25-basis-point rate cut by the Fed in two weeks, with about a one-third probability of a 50-basis-point cut.
However, Citigroup traders anticipate deeper cuts, forecasting three 50-basis-point rate cuts before year-end. "Risk markets are currently more sensitive to growth dynamics than to interest rates,"
said Bilal Hafeez, CEO and head of research at Macro Hive, adding, "If the data comes in weak, risk markets such as equities will take a heavy hit."
