US pre-open: Futures edge higher, but gains limited ahead of payrolls data

Wall Street indices were trading with small gains in pre-market dealings with investors mostly choosing to keep their powder dry ahead of the all-important non-farm payrolls data due out at 0830 ET.

By 0622 ET, futures on the Dow, S&P 500 and Nasdaq were all up 0.2%, after closing with losses of around 0.1% on Thursday.

The ADP Employment Report on Wednesday showed that just 89,000 jobs were created in September, down from an upwardly revised 180,000 the previous month and well below the 160,000 expected by analysts.

However, the 'official' non-farm payrolls report, can often contrast with the ADP figures and is expected to show that job creation eased to 170,000 last month, from 187,000 previously.

"The report was likely to be pivotal in determining whether the Fed would hike rates at its next policy meeting in November," said Manoj Ladwa at ARJ Capital.

"However, uncertainties regarding the longer-term rate outlook were expected to persist. The labor market report is expected to show continued strength, with forecasts of moderate job growth, a decline in the unemployment rate, and modest wage growth. These factors would provide some justification for another rate hike by the Fed but may not offer a clear-cut decision, especially considering recent increases in bond yields, which could be perceived as tightening financial conditions."

The yield on a 10-year US Treasury note was up 3.5 basis points at 4.743% ahead of the opening bell in New York, after hitting a high of 4.887% earlier in the week – a fresh 16-year peak.

In company news, Exxon Mobil was making headlines on reports it is close to sealing a $60bn takeover of Pioneer Natural Resources. Exxon's shares were 2% lower in pre-market trade while Pioneer futures surged 11%.

G1 Therapeutics and Apellis Pharmaceuticals were both reacting to ratings changes by JP Morgan. G1 was hit with a downgrade to 'underweight', while Apellis was lifted by an upgrade to 'neutral'.