As DB so well-puts it, "Welcome to random number generator day also known as US payrolls." Consensus expects 185k jobs to have been added in October but it’s fair to say that the whisper number has edged up this week with slightly firmer US data. It is also fair to say that even if one knew the number beforehand, it would be impossible to know how the market will react. Recall that the October mega rebound started with the 57 point S&P 500 turnaround on the weak payroll number last month, and then in the last few weeks, the rally continued on good economic news, as the odds of a rate hike jumped, as did the Dollar and for some reason algos assumed that this (manifesting in a spiking USDJPY) is good for corporate earnings and the S&P. In other words, stocks may well jump in the NFP misses and they may jump more if the NFP beats. At the end of the day, it all really depends on the micro-HFT spoofing by Citadel of the E-mini with the NY Fed's green light of course. According to DB's Jim Reid, the best number for the market is "probably one between 150-180k might be the immediate sweet spot. We haven't eradicated slow down fears enough to revel in another weak number but with this week's strength in the dollar and renewed weakness in Oil and EM post-Yellen's hawkishness, a strong number would risk reinforcing these themes." The answer will be revealed in two hours but whatever it is, it will almost certainly result in another intraday S&P high, just so the stop-hunting algos prove they still are in control. For now a quick look at overnight markets, first a look at Asia where equity markets traded mostly higher in a subdued session, following the lacklustre close on Wall St. as participants remained cautious ahead of the US NFP report. Nikkei 225 (+0.8%) was is in minor positive territory as it extended on its recent gains although volumes were light, while the ASX 200 (+0.4%) also saw marginal gains as commodity weakness was offset by defensive stocks. Chinese bourses saw mixed trade with the Hang Seng (-0.8%) underperforming amid profit taking coupled with pressure from the energy sector, while the Shanghai Comp. (+1.9%) extended its charge into bull market territory led by tech strength. Speaking of China, “It’s very difficult to see this [China] rally sustaining without an earnings recovery,” said Tony Chu, a Hong Kong-based money manager at RS Investment Management, which oversees ~$18b. However, Chinese A50 futures sank -1.7% after the close following unexpected announcement by China Securities Regulatory Commission spokesman Deng Ge that China would resume liquidity-draining IPOs which had been halted earlier in the year following the July market rout. IPOs won’t resume before Nov. 20, says separate CSRC official, who asked not to be identified because of agency rules. Deng adds that 28 companies were in the process of listing, when the current freeze began, says Deng, and 10 of those will restart the process of listing after Nov. 20. It would then take them two weeks to complete the process, while the other 18 cos. will sell shrs by the end of the year says Deng. Elsewhere in less euphoric news, and proving just how devastating, and deflationarty, the commodity excess capacity tsunami is, the world's biggest steel maker ArcelorMittal, cut its full-year profit target and suspended its dividend, and as Bloomberg notes, put the blame on the flood of cheap steel from China’s loss-making mills. The market is being overwhelmed with material coming from the nation’s state-owned and state-supported producers, a collection of industry associations said Thursday. “It is obvious that we are operating in a very challenging market,” Chief Financial Officer Aditya Mittal said on a call with reporters. “This is essentially the result of very low export prices out of China that are impacting prices worldwide.” Asian Wrap MSCI Asia Pacific down 0.2% to 135 Nikkei 225 up 0.8% to 19266 Hang Seng down 0.8% to 22867 Shanghai Composite up 1.9% to 3590 S&P/ASX 200 up 0.4% to 5215 In Europe, there was another major economic miss after German Industrial Production continued the recent series of misses and dropped -1.1%, on expectations of a 0.5% rebound, and cautious sentiment dominated the price action as market participants positioned for the upcoming release of the latest US jobs report by the BLS . Despite being heavily weighted towards defensive sector (healthcare), the French CAC-40 index (-0.7%) underperformed its peers (Euro Stoxx: -0.4%), with pharma major Sanofi (-5.44%) falling the most in 6-months amid somewhat disappointing investor day commentary. At the same time, luxury names lost some of its sparkle after the Geneva-based maker of luxury watches and jewellery Richemont (-7.5%) posted somewhat mixed trading performance and warned over challenging H2. Bunds traded bid, albeit marginally, with the Short-Sterling curve extending bull flattening bias following yesterday's dovish BoE as market participants continued to re-price interest rate expectations. European data: Germany Sept. industrial production -1.1% m/m vs survey +0.5% U.K. Sept. industrial production -0.2% m/m vs survey +0.1% Spain Sept. industrial production +3.8% y/y vs survey +2.8% Austria Oct. wholesale price index -4.1% y/y European wrap: Stoxx 600 down 0.5% to 377 FTSE 100 up less than 0.1% to 6368 DAX down 0.3% to 10859 German 10Yr yield down less than 1bp to 0.6% Italian 10Yr yield down less than 1bp to 1.69% Spanish 10Yr yield up 2bps to 1.82% S&P GSCI Index up 0.8% to 358.3 In FX, the Dollar Spot Index touches a new 7-monht high as investors await U.S. employment data. GBP reaches 1-mo. low vs USD as investors digest BOE’s signals from Super Thursday and look fwd to U.S. jobs report. The EUR/GBP advances towards the 100DMA line while the GBP/USD 1-month vol edged higher to 7.59 vs. Prey. 6.9 yesterday prior to risk events, while the latest reading of manufacturing and industrial production failed to move GBP. Of note, RBA statement of monetary policy said there is capacity to easy policy further if needed to uplift demand, and that prospects of economic improvement are firmer in recent months. RBA also lowered its Q2 2016 CPI forecast to 1.5%-2.5% from 2%-3% and lowered its GDP forecast to 2.25% from 2%-3% in the same period. (BBG) In commodities, gold has recovered from some of yesterday's losses amid position squaring heading into today's key risk US non-farm payrolls report , with prices on course for a 3rd consecutive weekly decline on prospects of a December Fed rate lift-off. WTI and Brent also trade relatively range bound, ahead of NFP's and with a lack of key fundamental news driving price action. Elsewhere, copper prices remained weak, languishing around 5-week lows, while iron ore iron also saw mild losses on concerns over Chinese demand. Elsewhere, Reuters reproted that OPEC are unlikely to cut production in the December meeting if non-OPEC members do not agree to do the same, according to a Gulf delegate. Apart from focusing on the latest US NFP release, attention will also be on the latest Canadian jobs report, Baker Hughes rig count data and comments from Fed's Bullard and Brainard, as well as the consumer credit print before the close of the week. Top News AstraZeneca to Buy ZS Pharma for $2.7 Billion in Cash Deal: Co. to buy ZS Pharma of California to gain a potential blockbuster medicine for a deadly condition. MetLife Says Finra Staff Recommends ‘Significant Fine’ of Broker: Finra has indicated it will seek “significant fine” from co.’s broker-dealer unit as part of probe into possible violations tied to variable annuities. Disney Profit Tops Estimates With ESPN Unit a Bright Spot: ESPN ad revenue this qtr is pacing up signifiantly. Goldman to Speed Promotions to Stem Junior Banker Defections: Faster promotions, third-year rotations, more automated tasks are among latest changes to improve life for young investment bankers. Towers Watson Holders Should Reject Willis, Advisers Say: Shrs have plunged since deal was announced; “effective premium” offered to co.’s shareholders has declined as well: ISS. Valeant Said to Pay Behind Schedule on $17m in Royalties: Market Wrap S&P 500 futures down less than 0.1% to 2093 Stoxx 600 down 0.5% to 377 MSCI Asia Pacific down 0.2% to 135 US 10-yr yield down less than 1bp to 2.23% Dollar Index up 0.19% to 98.12 WTI Crude futures up 0.7% to $45.51 Brent Futures up 1% to $48.46 Gold spot up 0.4% to $1,108 Silver spot up 0.3% to $15.03 Bulletin Headline Summary Cautious sentiment dominated the price action in European trade as market participants positioned for the upcoming release of the latest US jobs report by the BLS The spill-over effects from yesterday's BoE announcements resulted in GBP underperforming its peers, with EUR/GBP advancing towards the 100DMA Apart from focusing on the latest US NFP release, attention will also be on the latest Canadian jobs report, Baker Hughes rig count data and comments from Fed's Bullard and Brainard Treasuries steady before report forecast to show U.S. economy added 185k jobs in October and unemployment rate fell to 5.0% from 5.1%. China will lift a freeze on IPOs by the end of the year, removing one of its key measures of support for the stock market as equities recover from a $5t rout St. Louis Fed President James Bullard tells Reuters in interview that Fed may need a new communications campaign to convince markets and the public of a counter-intuitive idea: that slowing monthly job growth is natural at this point in the recovery German industrial production fell 1.1% from August, when it declined a revised 0.6%, data from the Economy Ministry in Berlin showed on Friday ECB Executive Board member Peter Praet says in speech in Frankfurt that asset-purchase program “is intended to run until we see sustained adjustment in inflation toward our medium-term aim” Tullet Prebon confirms it is in talks regarding possible acquisition of ICAP’s global broking business, including ICAP’s associated technology and broking platforms, ICAP’s associated information services revenue and certain of ICAP’s joint ventures and associates Pimco is showing signs of “green shoots” following a prolonged period of outflows and the departure of co-founder Bill Gross, Dieter Wemmer, CFO of parent company Allianz SE said in an interview $15.85b IG priced yesterday, $7b HY. BofAML Corporate Master Index OAS narrows 1bp to +162, YTD range 180/129. High Yield Master II OAS widens 7bp to +580, YTD range 683/438 Sovereign 10Y bond yields mostly lower. Asian stocks mostly lower, European stocks and U.S. equity-index futures decline. Crude oil and gold higher, copper falls US Event Calendar 8:30am: Change in Nonfarm Payrolls, Oct., est. 185k (prior 142k) Change in Private Payrolls, Oct., est. 169k (prior 118k) Change in Mfg Payrolls, Oct., est. -5k (prior -9k) Unemployment Rate, Oct., est. 5% (prior 5.1%) Average Hourly Earnings m/m, Oct., est. 0.2% (prior 0%) Average Hourly Earnings y/y, Oct., est. 2.3% (prior 2.2%) Average Weekly Hours All Employees, Oct., est. 34.5 (prior 34.5) Underemployment Rate, Oct., est. 9.9% (prior 10%) Change in Household Employment, Oct., est. 200k (prior -236k)Labor Force Participation Rate, Oct. (prior 62.4%) 3:00pm: Consumer Credit, Sept., est. $18b (prior $16.018b) Central Banks Speakers 9:15am: Fed’s Bullard speaks in St. Louis 4:15pm: Fed’s Brainard speaks in Washington 11:00pm: Bank of Japan’s Kuroda speaks in Tokyo DB's Jim Reid completes the overnight wrap Markets continue to be in risk-off mode post-Yellen's comments earlier in the week as US equities retreated again yesterday, although the fairly modest moves indicating that there’s not a whole lot of conviction ahead of today’s employment report. The S&P 500 nudged down -0.11% having pared some earlier heavier losses while the Nasdaq fell -0.29%. Another weak day for the Oil complex helped fuel this with WTI down -2.42% and back below $46 which takes it now nearly 4.5% down from the start of Yellen’s hawkish comments on Wednesday. In the same time frame the Dollar is up about +0.7% while if we look at some of the biggest losers in the FX space in that time there’s a notable EM theme with currencies in Malaysia, Colombia, Russia, Chile and Mexico among the biggest decliners. Credit indices widened a bit in the US (CDX IG +0.7bps) yesterday but again it was another busy day in the primary with $16bn of bonds (helped by bumper deals from Halliburton and Shell) said to have priced in the highest volume session since last Thursday bringing the weekly volume to over $30bn and making the $90-$100bn forecast for the full month look fairly achievable. Meanwhile, Treasury yields moved a tad higher with the 10y up another basis point at 2.232% and extending the seven-week high. In truth there was very little of note in yesterday’s data. Initial jobless claims rose 16k last week to 276k and above market expectations of 262k. The first estimate of Q3 nonfarm productivity printed at +1.6% qoq saar which was far better than expectations of a -0.3% decline. Meanwhile Q3 unit labour costs rose +1.4% qoq saar which was disappointing relative to expectations of 2.5%. Instead it was the Fedspeak which got more of the attention. The Atlanta Fed President Lockhart appeared to stick to his role as something of a centrist in the camp. Lockhart said that ‘I expect to see a subsiding of the risks that appropriately led, in my opinion, to a policy hold in September and October’ and so ‘I think the case for liftoff will continue to firm up’. Despite that, Lockhart also added that ‘liftoff remains a close call’ and that ‘revisions in my forecast of how quickly remaining output and inflation-target gaps might close could quite easily point to a longer period for a zero funds rate’. A decidedly dovish BoE was the other big theme yesterday, raising questions about a possible pushback in hike expectations to 2017 and which resulted in Sterling selling off over a percent versus the Dollar and Euro. Rates were left on hold as expected, by a majority 8-1 vote. Meanwhile, although the 2-year ahead CPI forecast was fairly unchanged to that in August, it was based upon a market yield curve implying the first rate hike in Q1 of 2017, as opposed to mid-2016 in the August projections. Near term inflation forecasts were nudged down. For the final quarter of 2015, the BoE expects inflation of just 0.1% (compared to 0.4% at August) while inflation is expected to reach 1.2% by the end of 2016 compared to the earlier forecast of 1.6%. BoE Governor Carney did say later in the Q&A that it’s ‘reasonably prudent behaviour’ that the majority of British people think rates will likely go up next year, but noted in particular the weakness and cuts to the global outlook due to China and emerging markets. Moving on. It’s a bit of a mixed end to the week in Asia this morning. Equity bourses in China have extended their bull run with the Shanghai Comp +1.20%, while the Shenzhen is up a sharp +2.10%. It’s a better end to the week for the Nikkei (+0.74%) and ASX (+0.42%) too, although the Hang Seng (-0.70%) and Kospi (-0.34%) are both in the red. Oil markets have recovered half a percent, although US equity futures are pointing towards a slightly softer open. The Aussie Dollar, although unchanged as we go to print, has had a slightly more choppy morning after the RBA’s quarterly update saw inflation forecasts lowered but signaled that the labour market is a little stronger than the RBA had previously expected. Meanwhile there was robust vehicle sales data out of China this morning, with sales up 11.3% in October which was the biggest monthly gain since March after the government had lowered taxes on small vehicles at the end of September. It was another mixed session in Europe yesterday. The Stoxx 600 finished -0.40% along with falls of similar magnitude in some of the peripheral markets. However the DAX rebounded +0.39% and the CAC closed up +0.64%. Data wise the highlight was a weak September German factory orders reading with orders down -1.7% mom (vs. +1.0%) expected following a similar decline in August. Core order numbers were soft too and this comes ahead of today’s German IP report and makes for an obvious downside risk to the current expectation of +0.5% mom. The data supports our European colleagues forecast for a more cautious Q3 GDP forecast (+0.3% qoq). Elsewhere, Euro area retail sales were softer than expected in September (-0.1% mom vs. +0.2% expected). Also of note yesterday were the new EC growth and inflation forecasts for the Euro area. The commission now expects 2016 GDP to be 1.8%, down from its initial 1.9% forecast in May. At the same time growth for this year was upgraded one-tenth to 1.6%. Inflation expectations were hit however with 2016 inflation now lowered to 1% from 1.5% previously, before increasing to 1.6% in 2017.Looking at the day ahead now, the main data of note in the European session this morning are the various September industrial production reports out of Germany, UK and Spain. We’ll also get the latest September trade data numbers out of France and the UK. The focus this afternoon will of course be on the October payrolls number, while we’ll also get the associated employment readings including the unemployment rate (expected to fall to 5.0% from 5.1%), average hourly earnings (expected to tick up to 2.3% yoy from 2.2%) and the labour force participation rate. Later in the evening the September consumer credit reading will be out. Of interest also will be the Fedspeak today. Shortly after the payrolls print at 2.15pm GMT Bullard is due to speak on the US economic outlook and monetary policy, while the Fed’s Brainard will be taking part in an IMF panel at 9.15pm GMT. Earnings wise its quiet with just 4 S&P 500 companies due to report, the highlight being Berkshire Hathaway. Meanwhile in Europe we’re due to get the latest quarterly updates from 16 Stoxx 600 companies. Before we wrap up, Chinese trade data for October is due to be released over the weekend along with the latest October foreign reserves data, so one to keep an eye on ahead of the open on Monday.