US futures are pointing to a lower open for stocks stateside, though the declines look relatively muted compared to the slump we saw in yesterday’s session:

• S&P 500 is called down 0.23%
• Dow is expected to fall 0.10%
• Nasdaq looks on track to drop 0.62%

Nancy Curtin, chief investment officer at Close Brothers Asset Management, says:

The US jobs market is in a good place. Unemployment has stayed flat while productivity goes from strength to strength. Moderate wage growth will give the Fed pause for thought when it comes to further monetary easing but, so long as productivity gains continue to gather pace, inflation shouldn’t be cause for concern.

More worrying is the business spending landscape.

Corporate investment is low, with firms sitting on cash and engaging in share buy-backs rather than investing in the labour market. Digital transformation spending is contributing to productivity and should be encouraged, but with the trade war escalating and global slowdown spiralling it’s no surprise that business confidence has slumped.

It’s too soon to say what impact the new tariffs will have on the US economy and labour market, but Powell will need to be pragmatic and flexible if he hopes to sustain the expansion.

Here’s our full story on the jobs figures:

With most of the data matching economists’ forecasts, there is not a lot of market reaction to the non-farm payroll figures.

However, we’re seeing a slight rise in the US dollar, which took a spill after Trump’s trade threats overnight:

More on the US jobs data:

• The US unemployment rate also matched forecasts exactly, staying steady at 3.7% in July

• Average earnings rose 3.2% year-on-year, at a slightly faster pace than the 3.1% reported in June. Economists had been predicting a 3.1% rise

Trump’s pending trade tariffs on the remaining $300bn worth of Chinese goods are likely to have severe ramifications for global growth, Richard Partington reports.

The White House already charges tariffs of 25% on $250bn of Chinese goods sold in the US as part of the long-running trade standoff. Total Chinese exports to the US were worth $539.7bn last year.

The US-China trade dispute has had a chilling effect on the world economy as global trade volumes plummet and major companies pause investments. Growth has eased around the world, while several major countries have flirted with recession.

Factory output has plunged across Europe, dragging down growth in Germany and Italy. Alongside the impact of Brexit, economic growth in Britain has dipped to stalling point amid the trade conflict.

US economic growth has also slowed on the back of the dispute, putting pressure on the US Federal Reserve to cut interest rates to support the economy. The US’s central bank cut rates this week for the first time in a decade.

Investors are also turning to low-risk German bonds in an attempt to safeguard their cash.

Higher demand has driven up prices, but sent yields – which measure the rate of return – on Germany’s 30-year bonds near 0%

While safe haven assets like gold are riding high on the back of market jitters, prices for metals like copper are falling.

The US-China trade dispute stands to weaken global economic growth and demand for metals.

Benchmark copper prices are down around 1.4% at $5,816 per tonne and have fallen 2.5% over the week.

Trump may be gambling with his voter base by inching towards tariffs on consumer goods that come from China like tech and toys, says CMC Markets UK analyst Michael Hewson:

European markets have sunk like a stone this morning after President Trump’s unexpected decision to announce 10% tariffs on the remaining $300bn of Chinese goods, from the 1^st September. It is difficult to understand the President’s thinking here given that these particular tariffs are likely to hit his base the hardest, given that these goods will include the staples of the US consumer, like apparel, toys and electrical goods.

This helps explain why US retailers felt the brunt of last night’s sell off in the US yesterday, as pressure builds to absorb any price increases into their margins. It’s also important to remember that US consumer confidence rebounded strongly in July. It’s likely to take a big hit lower if these tariffs come to pass.

Back in the UK, holidaymakers are being hit with news that two travel companies have gone bust. Mark Sweney reports:

Holiday firms Late Rooms and York-based Super Break have collapsed, affecting more than 50,000 travellers.

Malvern Group, which owns the booking website LateRooms.com and Super Break, said about 400 Super Break customers were on holiday in the UK or overseas.

Super Break was a member of Abta and the travel trade body said that most customers affected should be able to get a refund for their trip. It added that those already away should be able to continue with their holiday as normal.

The two companies had about 53,000 customers between them, involving 20,000 bookings, with most holidaymakers yet to start their trips.

China has warned that it will retaliate if Trump follows through with his latest tariff threats.

At a news briefing in Beijing, Chinese Foreign Ministry spokeswoman Hua Chunying said:

If America does pass these tariffs then China will have to take the necessary countermeasures to protect the country’s core and fundamental interests.

She said China hopes the US would give up its “illusions” and return to negotiations on the basis of respect and equality.

We won’t accept any maximum pressure, intimidation or blackmail. On the major issues of principle we won’t give an inch.

The German stock market is one of the worst-hit among major European indices caught in the middle of the US-China trade war.

The Xetra DAX opened lower by around 2.3% and is now down 2.5%

Fiona Cincotta, a senior market analyst at City Index, says it could fall further depending on what eventually comes of Trump’s EU trade announcement later today:

Caught in the crossfire European markets plunged on opening with the FTSE dropping 1.78% and the heavily China-exposed DAX falling 2.3%.

The German index could end up having an even worse day later when President Trump is due to make an announcement about European trade.

Given the President’s less than conciliatory mood it is likely that the threatened tariffs on European Union cars, Airbus and food and alcohol could be back on the agenda.

And in corporate news, we’ve had at least three FTSE 100 firms announce results this morning:

• Royal Bank of Scotland is at the bottom of London’s blue chip index after the bank warned that deteriorating economic conditions in the lead up to Brexit would hit profits and cost targets next year. Even a £1.7bn shareholder payout couldn’t soften the blow, sending shares down more than 6% to 203.5p.

• In contrast, British Airways owner IAG is holding the top spot on the FTSE 100, up 2.4% at 423.6p. The company this morning reported operating profit of €960m, above City estimates of €914m, as revenues per passenger rose 1% in the second quarter. IAG’s CEO Willie Walsh said he had seen no impact on bookings due to Brexit.

• Meanwhile, BT fell 3% to 188p per share despite beating analyst forecasts for first quarter earnings. The telecoms giant, which owns mobile operator EE, reported a 1% drop in first quarter adjusted revenue to £5.63bn, higher than expectations for £5.59bn. Adjusted core earnings of £1.96bn was above forecasts of £1.89bn, but analysts said its consumer division failed to deliver.

The prospect of a ramped up US-China trade war has caused investors to dump stocks in favour of safe haven assets including gold.

The precious metal’s price could face higher demand if this afternoon’s US jobs numbers fail to meet forecasts.

Lukman Otunuga, Senior Research Analyst at FXTM says:

Gold glittered with extreme intensity on Thursday, jumping to a fresh two week high above $1445 as Trump’s tariff tweets sent investors stampeding for safety.

The precious metal has scope to push higher this afternoon if the pending US jobs report fails to meet market expectations. With concerns over slowing global growth, renewed US-China trade tensions and Brexit uncertainty accelerating the flight to safety, Gold is fundamentally bullish.

Focusing on the technical picture, an intraday breakout above $1445 could encourage a move higher towards $1450 and $1470, respectively.

Brexit uncertainty has left construction firms with little confidence that business will pick up in the months ahead, according to the IHS Markit/Cips Construction PMI report:

Construction companies meanwhile reported a sharp drop in their confidence regarding the year-ahead outlook for business activity.

The latest reading was the lowest since November 2012.

Survey respondents often cited Brexit uncertainty, the prospect of a General Election and delays to infrastructure work.

Howard Archer, chief economic adviser to the EY ITEM Club, reminds us that this is the third straight month of contraction for the UK construction sector:

European luxury stocks are weaker this morning, amid worries that China could retaliate against Trump’s tariff threats.

French and Swiss luxury brands including LVMH, Kering, Hermes, Moncler and Ferragamo are each down by around 2-3%.

High-end Swiss stocks like Richemont and Swatch are down 3.4% and 5%, respectively.

In the UK, Burberry is down nearly 3%.

Connor Campbell, a financial analyst at SpreadEx, laments that even the by-election win for the Liberal Democrats in Wales wasn’t enough to buoy the pound:

You’d think Trump’s latest trade war cannon blast might take some of the spotlight off of sterling. Well, that wasn’t the case. Even the Lib Dems victory in the Brecon and Radnorshire by-election, a win that reduces Boris Johnson’s Commons majority to one, couldn’t prevent the pound from another round of losses.

All eyes have been on the pound in recent days, having slipped below $1.21 against the US dollar for the first time since since January 2017 yesterday.

But sterling seems to have stabilised slightly, down around 0.06% versus the dollar at $1.2122.

It’s faring worse against the euro, down 0.2% at €1.09.

Of the 10,000 businesses the Bank of England surveys across the country, three quarters are saying “they are ready as they can be” for the EU divorce, while 10% say they are ready for Brexit.

When those businesses are asked what they think will happen in a no deal scenario, Carney said most believe output will fall, jobs will be cut and investment will drop.

The Bank of England boss stresses that is the view of businesses, not the central bank. “We do not have an official forecast of no deal,” he reiterates.

Carney has also highlighted that major industries including the automotive, food and chemicals, and transport sectors have held back investment in light of Brexit uncertainty:

One of the reasons why the economy has slowed is that business investment is very, very weak. And it’s unusually weak at this stage in an economic expansion, it’s unusually weak given that there’s not spare capacity, and that the financial sector is wide open.

And the reason is because of uncertainty.

They could borrow the money and their balance sheets are good...and part of the uncertainty is that many of these businesses know that they could end up making an investment that turns out to be stranded because the trading relationship fundamentally changes.

More trade news is expected from the White House today.

Trump’s daily itinerary for Friday includes “an announcement on EU trade”, which sounds a bit foreboding after the threats against China overnight.

However, Bloomberg is reporting that the US president is set to unveil a deal to open the EU to more beef exports. It says American farmers will be entitled to around 80% or 35,000 metric tons of an annual EU quota on hormone-free beef over seven years.