By Sinéad Carew and Marc Jones

Market Overview

NEW YORK/LONDON (Reuters) – MSCI’s global equities index edged down on Thursday as investors digested mixed economic data while waiting for Friday’s crucial U.S. jobs report. Oil prices held near 14-month lows as demand worries offset draws on inventories.

Economic Data

U.S. Treasury yields fell, with two-year yields reaching a 15-month low after ADP’s private sector August jobs data showed fewer new jobs than anticipated. Thursday’s data revealed U.S. private employers hired the fewest workers in 3-1/2 years in August, and the July number was revised lower, hinting at a sharp labor market slowdown.

The weak data kept investor jitters high as they awaited Friday’s U.S. non-farm payroll report for August, expected to indicate how fast the U.S. Federal Reserve will cut interest rates at its September meeting. Economists expect 160,000 new jobs for August, up from 114,000 in July.

Bets have increased to 41% from 34% a week ago that the Fed might initiate its long-awaited easing cycle with a half percentage point move this month. However, traders see a roughly 59% probability that the cut will just be a quarter of a percentage point, according to CME Group’s FedWatch tool.

Market Reactions

On Tuesday, Wall Street indexes suffered their biggest daily losses in almost a month as investor anxiety about the U.S. economy intensified. Michael James, managing director of equity trading at Wedbush Securities, noted that the Tuesday’s decline damaged the bulls’ psyche and caused increased nervousness.

James stated, “Today’s data was similarly softer making it more likely we’re going to have a meaningful move in the market on the jobs report tomorrow morning,” implying that heightened anxiety levels would lead to trimming of positions.

However, Thursday data showed steady U.S. services sector activity, with the Institute for Supply Management’s non-manufacturing purchasing managers index at 51.5 in August, compared to 51.4 in July. Despite this, stock indexes lost steam as investors braced for Friday’s data.

Stock Market Performance

On Wall Street, the Dow Jones Industrial Average fell 219.22 points, or 0.54%, to 40,755.75; the S&P 500 lost 16.66 points, or 0.30%, to 5,503.41; and the Nasdaq Composite gained 43.37 points, or 0.25%, to 17,127.66. MSCI’s gauge of stocks across the globe fell 1.79 points, or 0.22%, to 813.26, marking its fourth straight day of declines. Earlier, Europe’s STOXX 600 index closed down 0.54%.

Currency and Oil Market

In currencies, the dollar eased as investors prepared for the U.S. payrolls report. The dollar index fell 0.17% to 101.09. The euro rose 0.22% to $1.1106, while the dollar weakened 0.2% to 143.44 against the Japanese yen.

In Treasuries, the yield on benchmark U.S. 10-year notes fell 3.9 basis points to 3.729%. The 30-year bond yield fell 4.7 basis points to 4.0207%. Two-year note yield decreased by 2.2 basis points to 3.7476%. A part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year notes was at a negative 2.1 basis points.

In energy markets, oil ended the session with little change as worries about demand in the U.S. and China offset a positive withdrawal from U.S. inventories. U.S. crude settled down 0.07% at $69.15 a barrel, marking its lowest close since December, while Brent crude closed at $72.69 per barrel.

Gold Market

Gold prices gained as the U.S. dollar and Treasury yields fell, driven by signs of a slowing labor market. Spot gold added 0.85% to $2,515.31 an ounce, and U.S. gold futures rose by 0.57% to $2,507.60 an ounce.