Oil languished near its lowest since the start of the war in Ukraine on Friday on fears of a global recession, although stocks shrugged off those concerns, ahead of U.S. jobs data that will give another index on the health of the largest economy in the world.
Benchmark Brent crude futures rose slightly to $94.23 a barrel and US crude futures also edged higher to $88.70 a barrel, after both closed the previous session to their lowest levels since February.
The losses were partly due to Wednesday’s data showing an increase in U.S. inventories over the past week.
“It’s a combination of the inventory data and a bit of worry about demand. Because the market is more worried about growth than inflation – although inflation is still an issue. major – the price of oil has come down,” said Prashant Bhayani, chief investment officer. Head of Asia at BNP Paribas Wealth Management.
In another warning sign for the global economy, the closely watched part of the US Treasury yield curve measuring the spread between two- and 10-year Treasury yields hit 39.2 basis points. overnight, the deepest reversal since 2000.
An inverted curve is often considered a harbinger of a recession.
On Friday morning, the 10-year yield was 2.6865% and the two-year yield was 3.0509, leaving the spread between them at 36.6 basis points.
“The bond market is saying there’s a pretty high risk of a recession, while the stock market is focusing on labor data,” Bhayani said.
MSCI’s broadest index of non-Japan Asia-Pacific stocks rose 0.74%, helped by gains in index heavyweight TSMC, which rose 1.8%, regaining ground than he had lost earlier in the week due to US House Speaker Nancy Pelosi’s visit to Taiwan.
The Japanese Nikkei gained 0.43%.
U.S. jobs data, due later today, is expected to show nonfarm payrolls rose by 250,000 jobs last month, after increasing by 372,000 jobs in June.
“We’re waiting to see a slowdown in the labor market, so if we get a big miss, that will finally confirm that the labor market is slowing, and we’ll see more rallies in US Treasuries. If it’s a beat , people are going to say, ‘well, it will eventually fail,'” Bhayani said.
In currency markets, the dollar index, which measures the greenback against six major peers, was at 105.86, after falling 0.6% overnight as US yields fell.
The pound was down a hair at $1.2142 after taking an overnight turn as the Bank of England raised interest rates and warned that a long recession was approaching Britain .
Spot gold was flat at $1,790 an ounce.