Market snapshot: today's data will move stock prices

It's the first Friday of the month, so it can only be one thing. Our head of markets looks ahead to US monthly jobs data and brings us up to speed with latest events.

Ahead of arguably the most eagerly awaited economic release of all, investors continue to grapple with the resolve which the Federal Reserve continues to demonstrate in its fight against inflation.

The US non-farm payrolls report this afternoon is expected to show that 250,000 jobs were added in September, compared to 315,000 the previous month, and that the unemployment rate will remain steady at 3.7%.

A stronger than expected number will send investors running for the hills once more, given that the Fed will retain the green light to proceed unopposed in its current rate policy. In contrast, a weak number could prompt hopes that aggressive rate hiking is beginning to take some effect, which in turn would revive the optimism of a Fed pivot which lifted markets earlier in the week.

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However, the Fed remains steadfast in its policy, with further comments from several of its members reiterating its higher for longer strategy on rates, and reiterating that its task is far from over. Investors who choose to ignore this mantra may well be labouring under false apprehension, while it is notoriously difficult to gauge how much of the tightening economic conditions are already priced in.

Employment data from earlier in the week provided a contrasting picture, with higher employment numbers being followed by increased jobless claims. The non-farm payrolls, as the accepted barometer, will reveal which of these is more accurate and is the most likely market-moving announcement of the day.

In the meantime, rising oil prices have reignited some inflationary concerns, which could add another reason for the Fed to stay on course. The relief rallies on Monday and Tuesday could propel the major indices to a weekly gain, without scratching the surface of the declines seen so far this year, with the Dow Jones down by 18%, the S&P500 21% and the Nasdaq 29%.

Asian markets have not escaped the turmoil, and indeed have been exacerbated by additional local issues such as the brittle state of the Chinese economy at present. Sentiment was dampened further overnight as Samsung declared a 32% drop in quarterly earnings, while tech stocks generally across the region remained friendless.

For the UK, the situation is little different. The FTSE250 has become the central focus of economic expectations on home soil and, buffeted by a government spending plan which has yet to put meat on the bones, the volatility and weakness of sterling and more recently poor retail sales numbers, the index has lost 25% in the year to date.

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The more idiosyncratic FTSE100 has given up gains from earlier in the year, but nonetheless remains the subject of curious interest among certain overseas investors.

The index has exposure to both cyclical and defensive stocks, earnings which the weakness of sterling will make more valuable when repatriated and an average dividend yield of 4.1%, which remains attractive even in the currently rising interest rate environment.

While the FTSE100 has declined by 5.5% this year, the performance of the index on the global stage remains one of relative resilience.