(Bloomberg) — Global stocks are expected to hold onto record highs hit on Thursday as traders turn their attention to U.S. jobs data due Friday for clues on the Federal Reserve’s interest-rate cut.
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Tokyo’s Topix index hit a new record before retreating. The moves followed gains in European stocks, led by French shares. U.S. stock futures were little changed in Asia after markets were closed on Thursday for a holiday.
Global stocks were on track for their longest weekly winning streak since March. The moves were driven by a string of weak U.S. economic data that revived hopes for a September interest rate cut. Emerging market stocks also benefited, with the MSCI Emerging Markets Index hitting a two-year high on Thursday.
“Markets are expecting employment in the U.S. to show a slight slowdown or stabilization. Any sign that the economy is cooling faster could be very positive for emerging currencies,” said Marco Oviedo, chief investment strategist at XP Investimentos in Sao Paulo.
The dollar index steadied on Friday after falling for a third straight day as developing world currencies rose broadly, led by the Brazilian real. Sterling was little changed after a rally that began last week as investors digested the possibility of a Labour victory in Thursday’s general election.
Opinion polls showed that Keir Starmer’s Labour Party was expected to win a large majority, while Rishi Sunak’s ruling Conservative Party was on course for its worst performance ever and was likely to see some of the party’s biggest names leave parliament.
France’s CAC 40 rose for a second day in a row as preparations for the final round of voting in early parliamentary elections this weekend continued. The index extended gains after opinion polls suggested that Marine Le Pen’s National Rally party and its allies would fall short of a majority.
In Asia, Australian and New Zealand bond yields were little changed early Friday. The yen was also steady after strengthening slightly in a rebound from its lowest since 1986 hit on Wednesday.
Data due out in the region on Friday includes inflation rates for the Philippines, Thailand and Taiwan.
Soft economic data
The U.S. services sector contracted at the fastest pace in four years, reports showed on Wednesday, while the labor market saw more signs of weakness ahead of key jobs data on Friday.
“With the supply management services index falling to 48.8 yesterday, the weakest since the pandemic, and job applications deteriorating, the negative data is ultimately seen as a positive for the markets,” said Justin Onwuekwuyosi, chief investment officer at St James’s Place. “September seems to be the date everyone is looking forward to now.”
US West Texas Intermediate crude oil prices rose slightly early Friday, while Bitcoin fell to trade around $57,800.
Main events this week:
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Eurozone Retail Sales, Friday
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US jobs report, Friday
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Federal Reserve Board Member John Williams Speaks Friday
Some key movements in the markets:
Stores
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S&P 500 futures were little changed as of 9:07 a.m. in Tokyo.
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Hang Seng futures were little changed.
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Japan’s Topix index was little changed.
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Australia’s S&P/ASX 200 index fell 0.2%.
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Euro Stoxx 50 futures rose 0.4%.
Currencies
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The Bloomberg Dollar Index was little changed.
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The euro was little changed at $1.0813.
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The Japanese yen was little changed at 161.32 yen to the dollar.
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The offshore yuan was little changed at 7.2926 against the dollar.
Cryptocurrencies
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Bitcoin fell 2% to $57,137.98
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Ether fell 2.7% to $3,058.45.
Bonds
Goods
This story was produced with the help of Bloomberg Automation.
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