Stocks Wobble as Traders Eye uS Payrolls Data, Yen At 2-month High

HK stocks set for greatest weekly performance in 4 months

Yen at 2 month high up on increasing bets on rate hikes this year

Gold constant near record peak, oil set for third weekly drop

By Ankur Banerjee

SINGAPORE, Feb 7 (Reuters) – Global stocks meandered on Friday ahead of essential U.S. payrolls data as financiers considered potential customers that a wider trade war might be prevented, while the yen struck its highest in almost two months on rising odds of more rate walkings in Japan this year.

In a week that began with U.S. President Donald Trump starting a trade war, investors have actually been reluctant in making significant relocations as threatened responsibilities on China were carried out.

Beijing’s determined tit-for-tat reaction has left space for negotiations, experts say, and that has actually permitted traders to focus on the AI theme in China in the wake of home-grown start-up DeepSeek’s development.

European futures pointed to a suppressed open after the pan-European STOXX 600 index closed at a record high on Thursday on the back of robust company incomes.

European stocks have staged their best performance in a decade against Wall Street in the first 6 weeks of 2025, but focus is now on whether those gains can be sustained.

Eurostoxx 50 futures were down 0.41%, while FTSE futures fell 0.39%. DAX futures relieved 0.21%.

Futures for Nasdaq and S&P 500 were down about 0.2% as shares of Amazon slipped in extended trading overnight on weak point in the retailer’s cloud computing system and soft forecast.

In Asia, Hong Kong’s Hang Seng Index hit a three-month high, poised for a 4% increase in the week, its greatest weekly performance sustained by DeepSeek-led AI bets.

China’s blue-chip stock index was 0.4% greater after touching a one-month high leaving MSCI’s broadest index of Asia-Pacific shares outside Japan at its greatest because mid-December.

“Whilst there is significant sound and uncertainty, we don ´ t see intensifying trade tensions as a video game changer in the prospects for the Chinese market,” said James Cook, financial investment director for emerging markets at Federated Hermes.

“China’s larger problem is not Trump however the domestic economy.”

On the financial front, jobless claims, layoffs and labour costs/productivity supplied a beginning to Friday’s acutely awaited January employment report, bbarlock.com with the data most likely to reveal the impact of wild fires in California and winter throughout much of the nation.

Nonfarm payrolls are anticipated to have increased by 170,000 jobs last month after surging 256,000 in December, a Reuters survey of financial experts revealed.

“Markets could face some volatility around the data if it beats expectations, but it will not alter the course of the FOMC policy as more data will be needed,” said Anderson Alves, a trader with ActivTrades.

Markets are pricing in 43 basis points of alleviating this year from the Fed with a rate cut in July totally priced in as policymakers remain in no hurry to start the rate-cutting cycle again.

While political uncertainties kept investors careful, fears have reduced that Trump’s approach to tariffs could escalate into an trade war.

RISING YEN

The Japanese yen has been on a tear this week buoyed by safe-haven circulations in addition to rising expectations of the Bank of Japan increasing rate of interest this year, with markets pricing in 34 basis points of walkings for the year.

The yen touched 150.96 per dollar in early trading, its strongest level considering that December 10 but was last a tad weaker at 151.71. The currency is headed for an over 2% rise against the dollar today, its greatest weekly efficiency because late November.

Sterling was 0.1% lower at $1.24255 after dropping 0.5% on Thursday as the BoE cut rate of interest by 25 basis points but cautioned it would be careful going forward, in the face of a potential inflation uptick and geopolitical concerns.

Oil prices rose marginally on Friday however were on track for a third straight week of decline.

Gold costs steadied on Friday near record-high levels and were headed for their sixth succeeding weekly gain driven by safe-haven flows.

(Reporting by Ankur Banerjee; additional reporting by Stephen Culp, Marc Jones and Alun John; modifying by Shri Navaratnam and Sam Holmes)