Morning Bid: US jobs test looms after Nvidia relief

A look at the day ahead in European and global markets from Gregor Stuart Hunter:

It's like Christmas came early for stock traders. Not only did Nvidia's earnings blow past Wall Street expectations - adding fresh impetus to a stock market rally that started on Wednesday - but the long-delayed September jobs report is also finally due for release.

Nvidia's results sparked a relief rally in Asia markets, with Japan's Nikkei 225, stocks in Korea, and Taiwan all posting hefty gains as tech manufacturers in the AI supply chain soared. The rebound was given fresh impetus by a Reuters report that the U.S. might delay long-promised semiconductor tariffs to help ease tensions with China.

Stock traders also lapped up news that the administration of Japan's Prime Minister Sanae Takaichi is reportedly preparing to pass a stimulus package that would be the country's biggest since the Covid-19 pandemic. The Japanese government bond market sold off sharply, with yields surging to record highs.

The yen weakened 0.1% to a ten-month low of 157.48 against the dollar, while a gauge which tracks the greenback's strength against a basket of six major peers advanced close to a two-week high.

Over in the U.S., the September jobs report will give investors a data point to try and make sense of the Fed's policy path, even though the six-week government shutdown had made the central bank's job that much harder. The Fed will still lack much of the data it usually relies on at the time of its next policy meeting on December 10, with the next jobs report now postponed until six days later to December 16.

In fact, traders view the lack of economic data as potentially justifying a pause, with Fed funds futures pricing a 33% probability of a 25-basis-point cut next month, down from a 50% chance a day earlier, according to the CME Group's FedWatch tool.

Even so, one more data point will allow for some clarity, and for investors a slightly easier calculation on where Fed policy is headed into Christmas and the New Year.

Key developments that could influence markets on Thursday:

Economic data:

Germany: Producer Prices for October

Euro Zone: Construction Output for September and Consumer Confidence Flash for November

U.K.: CBI industrial trends - Orders for November

Debt auctions:

France: 3-year, 5-year, 6-year, 8-year, 11-year, 15-year and 28-year government debt

Spain: 7-year, 10-year and 29-year government debt

Switzerland: 1-month and 6-month government debt

UK: 26-year government debt

(Reporting by Gregor Stuart HunterEditing by Shri Navaratnam)