This coming Friday’s US payroll data will be very closely watched by folks looking for data points that build the case for the US Federal Reserve to start cutting interest rates when it meets later this month, the Financial Times reports. Economists think the US economy added 163k jobs in August, and with Fed boss Jay Powell’s emphasis on the risks of a weaker labor market, “payrolls are going to be a huge number for the markets as well as the Fed,” Kevin Flanagan, head of fixed income strategy at WisdomTree told the salmon-colored paper.

REMEMBER- Powell has signaled that “the time has come for policy to adjust,” citing cooling inflation and slowing job growth as he foreshadowed a rate cut this month.

Pundits see the Fed going for a 25 bps rate cut, with a 30% chance of a deeper reduction, according to the CME’s FedWatch tool. However, softer labor data could result in a 50 bps rate cut, according to brokerage FP Markets.

Weaker data could reignite recession fears: July’s data of only 114k new jobs fell substantially short of the 175k new jobs forecast, helping spark a global market sell-off. A softer August labor figure could stoke fears of a sharper economic slowdown — and tip the scales towards a 50 bps rate.

Some beg to differ: Despite expectations of lower payroll data, some economists are on the fence about whether it will opt for the higher rate cut. “Non-farm payroll growth from April 2023 to March 2024 looks to be softer than first thought, but not worryingly so. That supports our view that when the Fed cuts interest rates it will do so in 25bp [basis points] steps, rather than a larger 50 bps cut,” North America economist at Capital Economics Olivia Cross wrote in a note to investors, The Guardian reports.

CIRCLE YOUR CALENDAR- The Fed’s Open Markets Committee is next set to meet 17-18 September.

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THE CLOSING BELL-

The DFM fell 0.2% last Friday on turnover of AED 494.2 mn. The index is up 6.5% YTD.

In the green: Dubai Refreshment Company (+13.5%), Watania International Holding (+2.9%) and Dubai Taxi Company (+2.7%).

In the red: National General Ins. Company (-4.8%), Al Ramz Corporation Investment and Development (-3.1%) and Shuaa Capital (-2.9%).

Over on the ADX, the index closed up 0.6% on turnover of AED 2.7 bn. Meanwhile Nasdaq Dubai rose 1.1%.

CORPORATE ACTIONS-

The National Investor sheds assets: The National Investor sold one of its wholly owned office floor real estate assets — comprising six office units located in Al Reem Island and representing 10.1% of the company’s share capital value — to Mazrui Real Estate for AED 24 mn, it said in an ADX disclosure (pdf). The company also sold its share in associate company NCC, representing 10.2% of share capital, for AED 25 mn, according to a separate disclosure (pdf).

REMEMBER- The sales are part of the company’s planned share capital reduction: The National Investor kicked off its planned AED 50 mn share capital reduction last week after securing approval from the Economy Ministry. The company is lowering its share capital from AED 285 mn to AED 235 mn, with the AED 50 mn set to be distributed to shareholders by 20 September. The company received shareholder approval for the capital reduction in July.

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