Global Stocks Set Fresh Peak Before US Jobs Data: Markets Wrap

(Bloomberg) — Global equities were set to hold onto record highs achieved Thursday as traders turned their attention to US jobs data for clues on Federal Reserve rate cuts.

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Stocks in Australia and Japan were little changed. Tokyo’s Topix index hit another new record. The moves followed gains for European shares, led by French equities. US stock futures were also little changed in Asia after markets were closed Thursday for a holiday.

A gauge of global stocks was on track for its longest stretch of weekly gains since March. The moves have been driven by a series of soft US economic data which has revived hopes for a September rate cut.

Emerging market equities also benefited as the MSCI Emerging Markets Index rose to the highest level in two years on Thursday.

An index of dollar strength steadied Friday after falling for a third day as developing-world currencies were broadly higher, led by the Brazilian real. The pound was little changed after a run of strengthening that began last week, as investors digested the prospect of a Labour Party victory in Thursday’s general election.

Exit polling data showed Keir Starmer’s Labour Party is projected to win with a huge majority, as Rishi Sunak’s governing Conservatives were on track for their worst-ever performance and would likely see some of the party’s biggest names voted out of Parliament.

“Markets expect US employment to show a slight slowdown or stability. Any sign that the economy is cooling faster could be very positive for emerging currencies,” said Marco Oviedo, a senior investment strategist at XP Investimentos in Sao Paulo.

France’s CAC 40 benchmark index advanced for a second day in the buildup to this weekend’s final round of voting in snap parliamentary elections. The gauge extended gains as polls suggested Marine Le Pen’s National Rally and its allies will fall well short of a majority.

In Asia, Australian and New Zealand yields were little changed early Friday. The yen was also steady after slightly strengthening in a rebound from the lowest level since 1986 reached on Wednesday.

Data releases in the region Friday include inflation for the Philippines, Thailand and Taiwan.

Soft Economic Data

Reports on Wednesday showed the American services sector contracted at the fastest pace in four years, while the labor market saw further signs of softening before Friday’s key jobs figures.

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“With the ISM services yesterday falling to 48.8, the weakest since the pandemic and job claims deteriorating, ultimately the negative data is being seen as positive for markets,” said Justin Onuekwusi, chief investment officer at St James Place. “It feels like September is the date everyone is now looking at.”

West Texas Intermediate, the US oil price, edged higher early Friday. Bitcoin slipped to trade around $57,800.

Key events this week:

• Eurozone retail sales, Friday

• US jobs report, Friday

• Fed’s John Williams speaks, Friday

Some of the main moves in markets:

Stocks

• S&P 500 futures were little changed as of 9:07 a.m. Tokyo time

• Hang Seng futures were little changed

• Japan’s Topix was little changed

• Australia’s S&P/ASX 200 fell 0.2%

• Euro Stoxx 50 futures rose 0.4%

Currencies

• The Bloomberg Dollar Spot Index was little changed

• The euro was little changed at $1.0813

• The Japanese yen was little changed at 161.32 per dollar

• The offshore yuan was little changed at 7.2926 per dollar

Cryptocurrencies

• Bitcoin fell 2% to $57,137.98

• Ether fell 2.7% to $3,058.45

Bonds

Commodities

This story was produced with the assistance of Bloomberg Automation.

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