A look at the day ahead in U.S. and global markets from Mike

Dolan

The strength of the U.S. labor market will give Wall Street's

interest rate relief a reality check on Friday, but Apple's ( AAPL )

monster share buyback has buoyed the market in advance.

The world's second biggest company by market capitalisation

wowed the gallery overnight with a whopping $110 billion stock

buyback program - the biggest in the iPhone maker's history -

and upped its dividend by 4% after a modest first quarter

earnings beat.

The news lifted Apple ( AAPL ) shares 6% in out-of-hours trading and

helped S&P500 futures extend Thursday's near-1% index rally

ahead of today's open.

It's also strengthened the tailwind from this week's Federal

Reserve meeting, which has calmed the Treasury market

considerably by quashing creeping fears of another interest rate

rise and surprising with a big taper of the Fed's balance sheet

runoff.

The upshot is that futures markets have bumped up full-year

Fed easing expectations to 40 basis points on Friday - 10 bps

more than was priced just before the Fed meeting. And two-year

Treasury yields have fallen to three-week lows below 4.90%.

The big test of that more relaxed view now comes from the

April U.S. employment report later. Private sector payroll

readings for last month and jobless claims updates this week

show little give yet in a still-tight labor market - even though

ebbing job openings data for March added a twist.

U.S. non-farm payrolls are forecast to have risen 243,000

last month, only marginally cooler than the 303,000 added in

March. The unemployment rate is expected to hold steady at 3.8%,

while annual average earnings growth is seen cooling to 4.0%.

Cooling inflation fears in the background have seen a recoil

of U.S. crude oil prices this week, back below $80 per

barrel for the first time in almost two months. And even though

the United Nations' Food and Agriculture Organization said its

food price index ticked up in April, it remains 7.4% below the

level a year earlier after hitting a three-year low in February.

Easier Treasury yields have taken the wind out of the

dollar's sails, however, as the currency market's

standoff with Japanese authorities over official yen

support remains tense.

After two bouts of Bank of Japan intervention this week to

buoy the yen from a 34-year trough at 160 per dollar, the

exchange rate fell back to three-week lows below 153 on Friday.

The week's intervention forays, which estimates suggest may

have totalled up to $60 billion in dollar sales, have tended to

come in relatively thin and illiquid markets.

With the world's biggest currency trading centre in London

closed for a bank holiday on Monday, there's likely to be some

trepidation among speculators who are heavily short yen going

into the weekend.

Elsewhere in Asia, Hong Kong stocks continued their

remarkable recovery on signs the China's government is stepping

up efforts to boost the economy.

The Hang Seng Index climbed 1.5% for a ninth

consecutive day of gains - its longest winning streak since

January 2018.

UBS says global hedge funds that use an equities long-short

strategy are growing increasingly bullish on China, evidenced by

the heavy pick-up in their purchases of Hong Kong-listed shares.

In Europe, Norway's crown rose after its central bank

kept its key policy interest rate on hold but said a tight

monetary policy stance may be needed for somewhat longer than

planned.

In company news, Anglo American jumped 3.2% after

Reuters reported that Glencore ( GLCNF ) was mulling an approach

for the 107-year old miner, a move that could spark a bidding

war. Glencore ( GLCNF ) was down 1.8%.

European banks were also buoyant. Societe Generale

jumped 5.5% following a lower-than-expected fall in

first-quarter net income, while Credit Agricole

climbed 3.7% after a forecast-beating 55% jump in first-quarter

net profit.

Key diary items that may provide direction to U.S. markets later

on Friday:

* US April employment report, ISM and S&P Global's April U.S.

service sector surveys

* New York Federal Reserve President John Williams and Chicago

Fed President Austan Goolsbee speak

* Japan's finance minister Shunichi Suzuki holds press

conference on sidelines of ADB meeting in Tbilisi. Brazil

president Luiz Inácio Lula da Silva meets Japan's Prime Minister

Fumio Kishida in Brasilia

* US corporate earnings: Hershey, Monster Beverage ( MNST ), CBRE ( CBRE ), Cboe

Global Markets, Trimble

(By Mike Dolan; Editing by Ros Russell;

[email protected])