Markets Struck Down By Jobs Report Jitters

Stock markets are falling on Friday ahead of the release of a crucial jobs report in the US which may determine whether the Federal Reserve raises interest rates this month.

The non-farm payroll report, released on the first Friday of every month, is always watched closely for clues on the health of the world's largest economy.

But this month's data - and especially wage figures - will be scrutinised particularly hard given the Fed's signal that the time is near to start raising borrowing costs from the lows of the financial crisis.

However, the International Monetary Fund (IMF) has been among world bodies suggesting the time for a rise may not be right, given the slowdown in China which has resulted in turmoil on the financial and commodity markets.

While China's markets have been closed since Thursday for public holidays, stock markets across Asia were gripped by nerves during Friday trading - with investors fearing a strong US jobs report will result in Fed action this month.

A weak survey would also suggest that US confidence has been knocked by China's economic troubles.

Japan's Nikkei closed more than 2% lower on Friday while in Europe the FTSE 100 joined other leading stock markets in opening more than 1% down - extending those losses as the morning progressed.

US futures pointed to lower openings on Wall St an hour after the jobs report is released at 13.30 UK time.

The IMF was joined on Thursday by the European Central Bank (ECB) in warning about the wider impact of the market turbulence over China and its slowdown.

The bank's governing council cut its inflation and economic growth expectations and refused to rule out the prospect of more quantitative easing to support prices and activity.

China is also expected to offer more stimulus, raising further questions about whether the Fed has been right to signal that US rates would rise this year.

It (Other OTC: ITGL - news) makes its next decision in just under two weeks' time.