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Jobs, inflation and pound parity.The hotly anticipated US jobs report has the potential to tip the scales toward a third jumbo-sized Federal [View in browser]( [Bloomberg]( Jobs, inflation and pound parity. Jobs, jobs, jobs The hotly anticipated [US jobs report]( has the potential to tip the scales toward a third jumbo-sized Federal Reserve hike in interest rates later this month. Forecasts call for a healthy, yet more moderate 298,000 gain in August payrolls and for the unemployment rate to hold steady at 3.5%, matching the lowest in five decades. Food inflation Global food prices fell for a [fifth month]( after demand for some products weakened and there was a seasonal uptick in supplies. Wheat harvests in the northern hemisphere are helping ease supply constraints, while more grain trickles out of ports in Ukraine. This may offer some relief to consumers as they grapple with a deepening cost-of-living crisis. Still, the declines are not as sharp as in July when prices [plunged]( the most since 2008, and food remains [more expensive]( than a year ago. Sterling parity The UK is facing a unique set of problems that makes the prospect of the pound becoming [worth less than a dollar]( ever less outlandish. Growth is set to slow sharply, the need for foreign capital is large, debt costs are set to spiral with high inflation, and the risk is growing that the central bank's independence will be curbed. On top of that, inflation is [expected to linger]( for at least three more years, according to British executives, while house prices -- an important driver for the UK economy -- are [expected to stall]( next year. The UK’s next prime minister will be named on Sept. 5. Bond bears Global bonds tumbled into their first [bear market]( in a generation ahead of today's US jobs numbers. European stocks ended a five-day losing streak, while S&P 500 futures were little changed as of 5:25 a.m. New York time and Asian shares fell. A dollar gauge held near a record high and the euro strengthened. Energy companies outperformed in Europe as oil rose to pare a hefty weekly decline before an OPEC+ meeting on supply. Russia looks set to [resume gas supplies]( through its key pipeline. For more, watch as Dani Burger and Markets Live's Mark Cudmore break down today’s key themes in this [short video](. Coming up... It’s all about the jobs market today. The report due from the Bureau of Labor Statistics will shed light on just how much the Fed can retain it’s focus on the inflation side of its dual mandate. But there’s also factory orders and durable goods numbers to think about — and don’t forget Canada’s labor productivity and Brazil’s industrial production. What we've been reading Here's what caught our eye over the past 24 hours. - Biden banks on [Democratic outrage](. - [OnlyFans]( owner gets $500 million. - RedBird and Yankees join to close $1.2 billion [AC Milan deal](. - Hedge-fund founder charged with [market manipulation](. - Don't abandon small businesses in the [energy crisis](. - [China lockdown]( latest. - Quants snap up shares in [Berkshire Hathaway](. And finally, here’s what Katie’s interested in this morning Friday brings the all-important US August employment data, among the last top-tier economic prints before the Federal Reserve’s September gathering. After Jerome Powell’s hawkish performance at Jackson Hole last week, the tired cliche of “good news is bad news” has worked its way back into the lexicon — the idea that a stronger-than-expected number would hit risk assets, given that Fed’s quest to quell inflation. Economists are expecting that US employers added 298,000 jobs last month and that the unemployment rate remained at a five-decade low of 3.5%. But even if you had a crystal ball and knew what 8:30 am Eastern would bring, would you know how to trade it? Bloomberg’s Vildana Hajric and I asked six pros that question ahead of the big day. From the perspective of risk assets, there’s the case to be made that good news will be bad news, according to Chris Zaccarelli of Independent Advisor Alliance, as the market is taking to heart the “stern talking to” it got from Powell on Aug. 26: For that reason, we think a strong jobs report will be a reason for a market selloff on Friday. Which means that the flipside is also true, and that bad news is good news, says Prosper Trading Academy’s Scott Bauer: That is a sign then for the Fed that OK, it’s starting to happen and maybe they don’t have to be as aggressive. And if the Fed’s not as aggressive, the market’s going to rip higher. The August numbers land in a beaten-up bond market, with 10-year Treasury yields climbing more than 20 basis points this week to about 3.25%, while 2-year rates touched the highest level since 2007. But even with the selling pressure, BMO Capital Markets’ informal pre-jobs survey found that 12% would buy into a rally should Friday’s numbers lead to a drop in yields — the largest read since November 2019. “Willingness to join a bid coming out of payrolls was the most topical takeaway from this month’s pre-NFP survey,” BMO’s Ian Lyngen wrote. “The takeaway being that a move toward lower yields after this week’s backup is seen as having room to run.” Follow Bloomberg's Katie Greifeld on Twitter [ @kgreifeld]( Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](. You received this message because you are subscribed to Bloomberg's Five Things - Americas newsletter. 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