World stocks are drifting as traders await a crucial US jobs report - 'There's a lot riding on today's nonfarm payrolls'

Reuters

Traders work on the floor at the NYSE in New York

• World stocks were treading water on Friday as traders awaited the release of a crucial monthly jobs report.
• "Markets are now frazzled by fear," one analyst said.
• "The last thing markets, central banks, or governments will want to see today is a weak US payrolls report confirming that the last man standing, and still global consumer of last resort for everyone except China, is about to slump," he said.
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World stocks were treading water on Friday as traders awaited the release of a crucial monthly jobs report.

The nonfarm payrolls number could provide some indication of whether the Federal Reserve will cut interest rates this month to boost the US economy. If it misses the Bloomberg consensus forecast of 145,000 - on top of disappointing US manufacturing, services, and payroll figures this week -the central bank could be forced to take action.

"Shaken by three soft readings this week - the two ISM prints and ADP payrolls - there's a lot riding on today's nonfarm payrolls," Neil Wilson, chief market analyst for Markets.com, said in a morning note.

If the US economy added fewer jobs in September than expected, and wage growth and the unemployment rate fail to impress, traders will have mounting evidence of a worldwide slowdown. Warning lights have been flashing in Europe and Asia for a while, but the US economy had been comparatively buoyant until this week.

"Markets are now frazzled by fear that what is obviously a synchronized global manufacturing downturn may be seeping into the services sector," Michael Every, senior Asia-Pacific strategist at Rabobank, said in a morning note.

"The last thing markets, central banks, or governments will want to see today is a weak US payrolls report confirming that the last man standing, and still global consumer of last resort for everyone except China, is about to slump."

Here's the market roundup as of 9:43 a.m. in London (4:43 a.m. EST):

• European equities rallied in morning trading. Britain's FTSE 100 rose 0.3%, the Euro Stoxx 50 rose 0.2%, and Germany's DAX was flat.
• In Asia, Chinese stock markets are closed for the Golden Week holiday. Hong Kong's Hang Seng dropped 1% after the government imposed emergency powers to quell protests. Japan's Nikkei rose 0.3%.
• US stocks are set to fall. Futures underlying the Dow Jones Industrial Average, S&P 500 and Nasdaq were down about 0.2%.
• Oil prices rose, with West Texas Intermediate up 0.5% to $52.70, and Brent crude up 0.6% to $58.10.