Global stocks paused near record highs on Friday, contrasting with a still wobbly dollar as investors watch if U.S. payrolls figures alter their expectations on when the Federal Reserve might scale back on its massive pandemic-era stimulus.
S&P 500 stock futures were up 0.2% after the index closed at a record high on Thursday, though the August non-farm payrolls figures due at 1230 GMT will set the opening tone on Wall Street.
MSCI’s all-country world index (.MIWD00000PUS), which had ended the previous session at its fifth consecutive closing high, inched up further by 0.13%.
There was little in the way of corporate news in Europe, though data showed that euro zone business activity remained strong last month, despite fears about the Delta variant of the coronavirus and widespread supply chain issues.
The STOXX (.STOXX) index of 600 European companies edged 0.15% lower to 473.89 points, still close to its record high of 476.16 points touched last month.
“The market is resilient with record highs in the United States again last night, and the data this week has been fairly solid, with nothing to suggest we are getting a significant slowdown in Europe, the UK or the U.S.,” said Michael Hewson, chief markets analyst at CMC Markets.
“Now it’s all about whether the payroll data arrests the decline of the dollar.”
U.S. non-farm payrolls in August are expected to have risen by 750,000, according to a Reuters poll of economists – weaker than the 943,000 in July.
But estimates range widely, from as little as 375,000 to over a million, and the U.S. central bank has made a labour market recovery a condition for paring back the pandemic-era asset purchases.
“When it comes to tapering the focus is now the labour market. If we’re in the area of 750,000 the expectation will be for a September tapering announcement,” said Stefan Hofer, Hong Kong-based chief investment strategist at LGT private bank.
Hofer said he was focused on leisure and hospitality jobs as they were a good indicator of the state of the recovery from the pandemic.
The dollar index , which measures the greenback against six peers, was little changed at 92.219 after earlier touching 92.151 for the first time since Aug. 5.
JAPAN JUMPS, CHINA EASES
Japan’s TOPIX stock index (.TOPX) rose to a 30-year high and was last up 1.61%, with the Nikkei (.N225) gaining 2%. Asian shares are still off their peaks from earlier in the year however, and lagging those elsewhere.
U.S. treasuries have been cautious ahead of the payrolls data release, and the yield on benchmark 10-year Treasury notes was last at 1.2954% compared with its U.S. close of 1.294% on Thursday.
The European single currency touched its highest level since early August against the greenback early in Asian hours Friday, as markets start to react to the potential for more sustained euro zone inflation and reduced stimulus from the European Central Bank, which meets next week.
Oil prices were firmer as traders squared positions ahead of the U.S. non-farm payrolls.
U.S. crude gained 0.13% to $70.12 a barrel. Brent crude edged up 0.5% to $73.39 per barrel.