Global markets were mixed as wild volatility in bond and currency markets eased ahead of key U.S. jobs data that could shape expectations for the Federal Reserve’s next policy move.

Wall Street futures were in positive territory after major U.S. markets closed up slightly yesterday.

TSX futures followed sentiment higher.

A strong jobs report could revive bets on a second Fed rate increase this month,

“With the Fed now myopically focused on inflation and price pressures, a hot wages print could prove particularly influential for U.S. rates, Treasuries ‌and the [the dollar],” ​said Chris Weston, head of research ‌at Pepperstone.

“Risk assets have so far absorbed the rise in U.S. real yields, and long-end nominal Treasury yields remarkably well. However, ​a sustained increase in term premium could be far more problematic.”

Overseas, the pan-European STOXX 600 was up 0.98 per cent in morning trading. Britain’s FTSE 100 edged down 0.05 per cent, Germany’s DAX advanced 0.97 per cent and France’s CAC 40 gained 0.65 per cent.

In Asia, Japan’s Nikkei closed 0.94 per cent lower, while Hong Kong’s Hang Seng fell 2.6 per cent.

Oil prices fell while European gasoil futures dropped ​more than 5 per cent after reports of ‌talks on additional diesel and crude stock releases, easing concerns over tight global energy supplies.

Brent crude futures declined 2.7 per cent to $99.52 a barrel. West Texas Intermediate (WTI) dropped 3.8 per cent to US$89.30.

“The whole energy complex trades lower, ‌led by gasoil and ULSD, as EU countries discuss releasing fuel and crude stockpiles to ease acute market tightness and help avert a potential U.S. diesel export ban,” Ole Hansen, head of commodity strategy at Saxo Bank, said.

In other commodities, spot gold held its ground at US$4,181.59 an ounce. U.S. gold futures rose 0.2 per cent to US$4,212.

The Canadian dollar weakened against its U.S. counterpart.

The day range on the loonie was 70.21 US cents to 70.41 US cents in early trading. The Canadian dollar was down about 2.8 per cent against the greenback over the past month. It traded at $1.4238 per US$1.

The U.S. dollar index, which weighs the greenback against a group of currencies, declined 0.17 per cent to 101.93.

The euro slipped 0.03 per cent to US$1.1240. The British pound gained 0.11 per cent to US$1.3209.

In bonds, the yield on the U.S. 10-year note was last down at 5.239 per cent.

Japan CPI and jobless rate

Euro zone CPI: Euro ​zone inflation surged more than expected in September – jumping to 3.8 per cent – and is likely to increase ​further in the coming months on soaring ‌energy costs, keeping pressure on the European Central Bank to raise interest rates even higher.

S8:30 a.m. ET: U.S. nonfarm payrolls for September. The Street expects a gain of 100,000 jobs with the unemployment rate remaining 4.1 per cent and average hourly wages up 0.3 per cent.

10 a.m. ET: U.S. factory orders for August.

Also: Canadian auto sales for September.

With Reuters and The Canadian Press