Geoffrey Smith 

Investing.com – It is time for the U.S. monthly labor market report. More than half a million Americans will have worked in the past month. According to recent data, the likelihood of an upsurge is high. While stocks are trading rangebound, the release will be at 8:30 AM ET (1330 GMT) but bonds yields have been soaring overnight and are under increasing pressure. Tesla (NASDAQ) has left California. The world’s energy markets are still in chaos with the continuing shortages of oil and gas from Europe, India, China and Europe. This is what you should know about financial markets Friday 8 October.

1. 1.Payrolls will cement Fed tapering expectations

This September’s U.S. Labor Market Report is available. It will take major hiring failures to change the general consensus that in November the Federal Reserve will begin to reduce its bond buying.

The U.S. is expected to add 500,000 jobs between mid-September and October as it recovers from the soft hiring environment caused by the Delta-variant Covid-19 summer wave. The risk of a surprise appears slightly skewed to the upside, given that ADP’s estimate of private-sector hiring – at 568,000 – was over 100,000 more than the estimates embedded in consensus for today.

The average hourly earnings growth is another important variable. It will slow to 0.4% for the month, but accelerate to 4.6% in an annual basis.

2. 2. Crisis? (China redux) 

China’s markets and factories reopened in largely positive mood after the extended Golden Week holliday, with few signs that the credit crunch among its real estate sector is affecting sentiment elsewhere.

The People’s Bank of China was able to dial down its daily open market operations without causing any undue volatility. The benchmark equity indices rose broadly and gained as high as 2.1%.

However, warning signs about emergency measures being taken to combat a growing energy crisis are continuing to be seen across the country. In a move that again highlighted the gap between government’s environmental promises and its near-term economic priorities, local coal miners were ordered to double their production by 72 million tonnes per year.

3. As bond yields reach new heights, stocks will open in mixed conditions

Stock markets in the United States are expected to open in close ranges before the payrolls releases. But, they may face some pressure from the bonds market where yields on benchmark Treasuries of five and ten years have continued to climb overnight. The 10-year was briefly above 1.60%, and the 5-year sat at 1.05%.

They were at 6:15AM ET (1115 GMT) and had gained 27 points, less than 0.1%. However, they were still flat, with a 0.1% decline. The passing of the bill to suspend U.S. government debt limits until December has helped all three indices continue their weekly gains.

Life Time Group is one of the stocks that will come into focus in the coming days. This follows a rather weak start on Thursday. Market participants are preparing for the beginning of third-quarter earnings season next Wednesday.

4. Tesla joins California exodus

Elon Musk announced at a shareholder meeting that Tesla will be moving its headquarters from California, to Austin Texas.

The company is the latest to relocate away from the country’s traditional tech hub in search of more affordable real estate and shorter commutes. At least, that’s how the company presents the move.

Tesla’s relationship with California has been strained for some time already, Musk chafing in particular at “fascist” social distancing measures imposed by state health authorities at the height of the pandemic’s first wave last year. 

Now, the energy market in Te- is better, oh dear, but…

5. New 7-year oil record as gas and coal shortages persist

Futures hit seven-year-highs, while those of three years ago reached new highs. The global energy markets were still raging due to the shortages occurring in China, Europe, and increasingly India.

Power rationing has spread across India as the country’s utilities have been unable, or unwilling, to pay sky-high import prices for thermal coal in a region-wide scramble for fuel.

In China, meanwhile, the shortage of accentuated by a fire on the new pipeline carrying gas from Russia’s eastern Siberian fields. While the pipeline is unlikely to have an immediate impact on major demand centers along both the east and south seaboards of China, any shortage will be acutely felt.

In Europe, meanwhile, gas prices continued to tick up in the absence of action to match Russian President Vladimir Putin’s offer of increased supplies earlier in the week.