Source: AFP
Stock markets mostly gained and the dollar steadied on Friday ahead of the release of key US jobs data, but Tokyo was hit by the yen’s recent rally.
All eyes were on the jobs data and the impact it would have on the outlook for US interest rates amid speculation that the Federal Reserve may cut borrowing costs in early 2024 as inflation falls.
Hopes of lower interest rates after a consecutive hike were behind last month’s rally in global stocks.
However, December was still waiting to take off due to the acceptance that the market may have been too strong in November.
There is also some caution among traders on concerns that weaker economic readings suggest the US economy could be headed for recession.
Friday’s data comes as inflation continues to ease and U.S. jobs and private payrolls slowed in November.
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“The jobs report is likely to provide additional evidence of an easing labor market, a welcome sign for employers,” said Jose Torres at Interactive Brokers.
“Its impact on markets, however, will depend on whether investors see the data as a stepping stone to a rate cut in March and a soft landing, or as a negative effect on consumer spending and a sharper economic slowdown.”
Wall Street’s three main indexes ended strongly on Thursday, led by the Nasdaq as tech giants outperformed.
Asian markets closed mostly higher on Friday and Europe was largely ahead heading into the halfway point.
However, Tokyo fell more than one percent as the yen continued to rise against the dollar, hitting exporters.
The currency rose nearly 4 percent at one point on Thursday after Bank of Japan chief Kazuo Ueda said the handling of monetary policy “will become even more difficult from the end of the year and heading into next year.”
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The observations suggested the bank was on the verge of moving away from its long-term ultra-loose monetary policy, notably the absence of interest rate hikes put in place to kick-start growth.
The comments came a day after Deputy Governor Ryozo Himino downplayed the negative effects of such a move on the economy.
Elsewhere, oil prices jumped about two percent after crude fell earlier in the week on worries about slowing demand, also as China’s economy struggles.
State broadcaster CCTV reported on Friday that President Xi Jinping said China’s economic recovery was “still at a critical stage” as subdued domestic activity and woes in the property sector drag on the post-pandemic recovery.
Keys around 1115 GMT
London – FTSE 100: UP 0.3 per cent at 7,539.45
Paris – CAC 40: UP 0.8 percent at 7,488.96
Frankfurt – DAX: UP 0.2 percent at 16,667.61
EURO STOXX 50: UP 0.6 percent at 4,498.63
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Tokyo – Nikkei 225: Down 1.7 percent at 32,307.86 (close)
Hong Kong – Hang Seng: DOWN 0.1 percent at 16,334.37 (close)
Shanghai – Composite: UP 0.1 percent to 2,969.56 (close)
New York – Dow: UP 0.2 percent at 36,117.38 (close)
Dollar/yen: UP to 144.55 yen from 144.10 yen on Thursday
EUR/USD: DOWN to $1.0785 from $1.0797
GBP/USD: DOWN to $1.2584 from $1.2587
Euro/pound: DOWN to 85.70 pence from 85.76 pence
West Texas Intermediate: UP 1.8 percent to $70.58 a barrel
Brent North Sea crude: UP 1.9 percent at $75.48 a barrel
Source: AFP