Global equity markets mostly traded lower on Wednesday ahead of the U.S. job report due to be published on Friday, which analysts have said can create volatility in the market.
The pan-European STOXX 600 traded 0.55 percent lower to 458.47 during the day. Britain's FTSE 100 also went down by 0.68 percent to 7,875.68. Germany's DAX also fell by 0.42 percent to 15,566.78.
In Asia, the MSCI's broadest index of Asia-Pacific shares outside Japan declined by 0.6 percent after seeing a 1.4 percent decrease in the previous session.
South Korea's Kospi index fell by 0.53 percent to 2,419.09. In China, the blue-chip CSI 300 lost 0.35 percent to close at 4,019.85. The Hang Seng index in Hong Kong also plunged 0.63 percent to 19,925.74. Japan's Nikkei 225 was one of the few gainers of the day, rising by 0.63 percent to 28,623.15.
Australia's benchmark index S&P/ASX 200 rose slightly by 0.05 percent to 7,311.1. On the other hand, the S&P/NZX 50 in New Zealand lost 0.25 percent to 11,826.15.
Wall Street also ended mixed on Wednesday. The Dow Jones closed at 32,798.40, falling by 0.18 percent. The S&P concluded the session at 3,992.01, rising by 0.14 percent but still trading below its support level of 4,000. Meanwhile, Nasdaq rose by 0.40 percent to 11,576.00.
Investors are now anticipating the job report for February that analysts have said will determine the path of the Federal Reserve's monetary policy. Analysts added that the data became more important after Fed chief Jerome Powell's remarks about his agency making a "data-dependent" decision for the upcoming rate-setting meeting.
"Powell conceded that the March decision is data-dependent," Thierry Wizman, a global FX and rates strategist at Macquarie, said. "The question facing us, therefore, is whether January's economic reacceleration was a blip or a trend."
In January, the job report showed that the U.S. had an additional 517,000 payrolls, a 200,000 jump from the initial estimate. That month's unemployment rate was also the lowest since 1969 at 3.4 percent, indicating that the job market remained tight.
In his testimony on Capitol Hill, Powell argued that the warmer weather in the U.S. last winter partially contributed to the robust job market. The warm weather meant fewer disruptions in various economic activities, leading to fewer layoffs.
Analysts expected 205,000 additional jobs in February, a significantly smaller increase compared to the previous month. However, they argue that the lower increase in payrolls will only do little to reduce the impact of the jump in January.
Futures tied to the S&P 500 and Nasdaq were in the red due to "pre-payrolls caution." Both indexes also struggled on Tuesday after private payrolls data showed a higher-than-estimated figure, while demand for home loans soared despite higher mortgage rates.
Updates on bond markets
The two-year U.S. Treasury yield was close to a 15-year high on Wednesday at 5.04 percent, while the 10-year yield remained steady at 3.9953 percent.
However, analysts pointed out that the yield curve between the two Treasury bonds was inverted at 108.2 basis points, the most significant inversion since 1981. The data is considered by the market to be a reliable indicator of a recession.
Germany also experienced a similar situation where its two-year and 10-year Treasury notes' yield curve was the most inverted since 1992. Its two-year yield was at 3.35 percent, while its 10-year yield was at 2.68 percent.
On the other hand, Japan is expected to maintain its yield curve control approach and ultra-dovish monetary policy. The country's 10-year government bond yield hit the Bank of Japan's policy cap of 0.5 percent again on Wednesday.
