(Bloomberg) — As traders focus on Friday’s key U.S. jobs figures, global stocks are hitting record highs.
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In Japan, the Topix index briefly hit a new record high on Friday morning, after surpassing the previous record set in 1989 in Thursday’s session. Korean shares rose after Samsung’s earnings beat estimates. British stock index futures rose and the pound held on to recent gains after the Labour Party won a majority of seats in parliament, giving it a clear mandate to deliver on its promise of greater economic stability.
China’s central bank has taken the next step by selling government bonds to temper a record rally, saying it now has access to “hundreds of billions” of yuan in securities through agreements with lenders.
A gauge of global stocks rose to a record high, driven by a string of soft U.S. economic data that revived hopes the Federal Reserve will begin cutting interest rates as early as September. A monthly payrolls report later on Friday will be in focus for markets.
“Given other evidence of a cooling economic backdrop – weaker ISM Manufacturing PMI and ISM Service Sector PMI reports – the payrolls report could prove increasingly decisive for the Fed as it looks for a reason to signal an easing of rates,” said Quincy Krosby, chief global strategist for LPL Financial.
Emerging market stocks also benefited, as the MSCI Emerging Markets Index rose to a two-year high on Thursday. European shares rose, led by French stocks, on indications that Marine Le Pen’s Rassemblement National party is unlikely to win an outright majority in the second round of elections this weekend.
The yen strengthened against the dollar for a second day on Friday, continuing its recovery from its lowest level since 1986 hit on Wednesday. An index of dollar strength fell for a fourth day as developing-nation currencies were broadly higher.
The pound continued its streak of strengthening that began last week. The Labour Party passed 326 of the 650 seats in the House of Commons, securing its long-predicted landslide victory in the general election. Rishi Sunak conceded defeat and Keir Starmer is now set to become prime minister.
In Asia, Chinese stocks are on track for seven straight weeks of losses – the longest streak since early 2012 – as investor sentiment continued to weaken ahead of a key policy meeting this month.
“The domestic economy is really weak with macro data from May-June and feedback from companies largely turning south,” said Xin-Yao Ng, director of investment at abrdn. There are “low expectations for economic support from the Third Plenum.”
Read: What to expect from the Third Plenary Congress, China’s major policy meeting
Meanwhile, government bond yields were little changed after trading resumed in Asia following the U.S. July 4 holiday. Australian and New Zealand yields were also flat.
Oil traded near a two-month high as Hurricane Beryl warned of a potentially worse storm season, while shrinking U.S. crude inventories pointed to improved demand. Gold headed for back-to-back weekly gains. Bitcoin fell to its lowest levels since February.
Important events this week:
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Eurozone retail sales, Friday
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US Jobs Report, Friday
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Fed’s John Williams to speak Friday
Some of the major moves in the markets:
Shares
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S&P 500 futures were little changed at 1:25 p.m. (Tokyo time)
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Nikkei 225 futures (OSE) were little changed
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Japan’s Topix fell 0.4%
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Australia’s S&P/ASX 200 fell 0.2%
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Hong Kong’s Hang Seng fell 1.1%
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The Shanghai Composite fell 0.9%
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Euro Stoxx 50 futures were little changed
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Nasdaq 100 futures were little changed
Currencies
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The Bloomberg Dollar Spot Index fell 0.1%
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The euro remained virtually unchanged at $1.0821
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The Japanese yen rose 0.4% to 160.63 per dollar
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The offshore yuan rose 0.1% to 7.2870 per dollar
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The Australian dollar rose 0.1% to $0.6736
Cryptocurrency
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Bitcoin fell 6.9% to $54,295.86
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Ether fell 8.3% to $2,883.26
Bonds
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The yield on 10-year government bonds remained virtually unchanged at 4.36%
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Japan’s 10-year yield fell one basis point to 1.070%
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The Australian 10-year yield fell one basis point to 4.40%
Raw materials
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West Texas Intermediate crude oil fell 0.2% to $83.75 a barrel
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Spot gold rose 0.3% to $2,362.66 an ounce
This story was produced with the help of Bloomberg Automation.
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