It's the final monthly employment report before the FOMC gathers for its upcoming March meeting. Consensus economist forecasts see a gain of 400K non-farm payroll additions last month, compared to the 467K gain in January, leaving employment only 2.5M jobs below its pre-pandemic level (those jobs losses are expected to be fully recouped this year). February's unemployment rate is also anticipated to fall 0.1 percentage points to 3.9%, while worker scarcity likely pushed up average hourly earnings by 0.5%, or 5.8% Y/Y. Stay tuned for the release of the report by the Labor Department at 8:30 a.m. ET.

Tough time: Payroll forecasts haven't exactly had a great track record over the past six months, with actual figures coming in at least 200K more or less than consensus estimates. Even today's payrolls projections range from as low as 200K at Deutsche Bank to as high as a 730K jobs gain at Morgan Stanley. It's been hard to estimate the data during the pandemic, with shifts in seasonal patterns and distorted measurements, while collecting timely employment data has also been a problem.

With all the things going on in the world, a strong American labor market should provide some optimism about the economy. In mid-February, the U.S. even recorded the smallest number of people on state unemployment benefits since 1970, though it's important to note there are downside risks as well, especially if today's jobs number comes in softer than expected. An ISM survey on Thursday showed a measure of services sector employment contracting in February, manufacturing employment growth slowed last month, while "widespread strong demand for workers remained hampered by equally widespread reports of worker scarcity" according to the Fed's Beige Book on Wednesday.

Policy path forward: "I think because we saw [Fed Chair Jay] Powell say, uncharacteristically frankly, specifically say that the planned to support a 25-basis point hike, that speculative thinking may be a little bit more anchored at a 25-basis point hike even if we do see a stronger-than-expected report," said Lauren Goodwin, economist at New York Life Investments. "Even 5.8% wage growth is a wage cut if inflation is creeping up above 7%."

Russia roundup

Europe's largest nuclear power plant, located in Enerhodar, Ukraine, came under attack from Russian shelling overnight, sparking a blaze and raising fears of a nuclear disaster. Ukrainian President Zelenskyy even spoke with President Biden, telling him that "if it blows up, it will be 10 times larger than Chernobyl," before the fire was extinguished and Russia took control of the facility. Stock futures whipsawed on the news, with the International Atomic Energy Agency saying "essential" equipment was not impacted and there had been no change to reported radiation levels.

Financial fallout: Russia today is keeping the Moscow Exchange closed for a fifth straight day, trying to shield stocks from a potentially brutal selloff. Over in the U.S., FINRA halted OTC trading in several Russian stocks, while the London Stock Exchange suspended trading in more than 50 Russian securities to "maintain orderly markets." Another wave of sanctions has also hit Russian oligarchs and Vladimir Putin's inner circle, ratcheting up financial pressure in response to Moscow's "destabilizing foreign policy."

The corporate pullout is accelerating at the same time, with Airbnb (NASDAQ:ABNB) announcing it would suspend all operations in Russia and Belarus. Earlier in the week, it offered to house 100K refugees for free in rentals listed on its platforms in countries that neighbor Ukraine. Google (GOOG, GOOGL) is also pausing all ads in Russia across YouTube, search and outside publishing partners, while "anything goes" Reddit even banned links to Russian state-sponsored media outlets like RT and Sputnik.

Big rally: Commodities prices have been on a rip this week, with the war in Ukraine continuing to fuel fears of supply crunches. Examples: Wheat soared to the highest level since 2008 (Ukraine and Russia account for a quarter of the world's exports), while crude and natural gas are up more than 20% this week as many spurn Russian energy sales. In response to the current environment, the EU went as far as to say it intended to more than double the amount of gas in storage before next winter to reduce its reliance on Russian supplies. (14 comments)

Chinese targets

China's National People's Congress will convene its annual parliamentary gathering on Saturday, setting economic and political priorities for 2022. Nearly 3,000 lawmakers will descend on Beijing, where the nation's rubber-stamp parliament will lay out targets for spending, employment, inflation and other growth goals. In recent years, President Xi has also used the NPC to further legitimize governance decisions, like the lifting of presidential term limits in 2018 and Hong Kong's sweeping national security law in 2020. Could this year's conference make a reference to Taiwan?

Snapshot: The fiscal and economic projections of the NPC are the most anticipated indicators on the direction of China's economy. This year, the Communist Party leadership is expected to lay out its lowest economic growth goal in more than three decades, adopting a GDP target of between 5% and 5.5%, according to analysts at BNP Paribas. That would be the first time since 1991 that the figure fell below 6%, so watch for a possible release of additional tax cuts and stimulus measures.

"Infrastructure seems to be the only sector that policy makers can boost," added Nomura economists led by Lu Ting. "But this would only fill a small part of the gap left by slowing export growth, the large property sector contraction and the rising costs of China's zero-Covid strategy." During the Central Economic Working Conference in December, Chinese leaders also expressed the need to tackle a "contraction of demand, supply shocks and weaker expectations."

Outlook: Beijing is unlikely to ditch its coronavirus policy based on lockdowns, but policymakers might call for less severe restrictions as the world adjusts to a post-pandemic environment. Some even expect further rate cuts or another reduction of the bank reserve ratio after similar measures in 2021 saw GDP growth expand by 8.1% (if the numbers can be believed). Other topics that may be addressed include the country's tumbling birth rate and tighter tech regulation that has wiped out billions of dollars in stock market value. (5 comments)

More EVs

Everyone is trying to get into the crowded EV industry these days, no matter if you're a traditional automaker, startup or even a tech company. The latest industry tie-up saw Sony (SONY) join hands with Honda Motor (HMC) to develop and sell battery electric vehicles. Chinese tech giants Baidu (BIDU) and Xiaomi (OTCPK:XIACF) also recently formed electric vehicle divisions, while rumors abound about self-driving electric cars from Apple (AAPL).

More details: The joint venture is expected to be established later this year, with sales of the first vehicle due to start in 2025. With over seven decades of experience in car making, Honda will be responsible for the manufacturing side of the business, while Sony will develop the mobility service platform for the new company. Other details of the agreement are still being ironed out.

"Although Sony and Honda are companies that share many historical and cultural similarities, our areas of technological expertise are very different," Honda CEO Toshihiro Mibe declared. "Therefore, I believe this alliance, which brings together the strengths of our two companies, offers great possibilities."

On watch: At the Consumer Electronics Show in January, Sony showed off an electric concept SUV called the Vision-S 02, but it's unclear how and if the idea would be part of the new Honda partnership. The prototype was based on an earlier Vision-S 01 concept sedan that Sony unveiled at CES 2020. (6 comments)

Today's Markets

In Asia, Japan -2.2%. Hong Kong -2.5%. China -1%. India -1.4%.
In Europe, at midday, London -3.1%. Paris -3.2%. Frankfurt -3.2%.
Futures at 6:20, Dow -0.8%. S&P -0.8%. Nasdaq -0.7%. Crude +2.4% to $110.24. Gold +0.8% to $1950.60. Bitcoin -4.1% to $41732.
Ten-year Treasury Yield -6 bps to 1.78%

Today's Economic Calendar

8:30 Non-farm payrolls
8:45 Fed's Evans Speech
1:00 PM Baker-Hughes Rig Count

Companies reporting earnings today »

What else is happening...

Russian ETFs continue their downward spiral; RUSL will de-list.

Best Buy (BBY) raises dividend, pointing to future growth potential.

Gap (GPS) soars after full-year profit outlook beats expectations.

Broadcom (AVGO) pops as Q1 results, guidance top estimates.

Musk says Tesla (TSLA) would not stop union vote in California.

Bumble (BMBL) drops 15% for worst day in months, ahead of earnings.

Purdue Pharma, Sacklers reach new $6B opioid settlement with states.

Kroger (KR) notches fresh 52-week high following earnings topper.