(Bloomberg) — Global stocks traded at all-time highs ahead of crucial U.S. jobs data that is expected to show some moderation in hiring. The pound marked its longest winning streak in four years after Labor took power in the UK general election.
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A series of soft U.S. economic readings have revived hopes that the Federal Reserve will begin cutting interest rates as early as September, sending MSCI Inc.’s world stock index up. in a record. Treasury yields fell on Friday and the dollar fell for a fourth day to a three-week low.
“Given other evidence of a cooling economic backdrop – the weaker ISM Manufacturing PMI and ISM Service Sector PMI reports – the payrolls report may be increasingly crucial for the Fed as it looks for a rationale to signal easing of rates,” said Quincy Krosby, global chief. strategist for LPL Financial.
U.S. futures showed a steady open when Wall Street returns from Thursday’s holiday. Tesla Inc. rose in the premarket, on track to turn positive for 2024 after a seven-day winning streak that added about $200 billion to market value. Macy’s Inc. was gathered after the Wall Street Journal reported that Arkhouse Management and Brigade Capital Management have increased their takeover offer to about $6.9 billion.
In contrast to the positive tone for stocks, Bitcoin fell to its lowest level since February, falling for a fourth session as part of a broader crypto selloff. Crypto speculators currently face a number of challenges, including falling demand for Bitcoin exchange-traded funds in the US and signs that governments are removing seized tokens. Crypto-related stocks fell.
European shares rose, led by the technology sector. In the UK, domestically focused stocks and government bonds rose and the pound strengthened for a seventh day after Labour’s landslide victory, which gave Keir Starmer’s party 412 of the 650 seats in the House of Commons and a clear mandate for fulfill a promise. of greater economic stability.
“A clear majority could bring much-needed stability to the UK political landscape at a time of heightened global uncertainty,” said Samuel Zief, head of global FX strategy at JP Morgan Private Bank. That “may provide some bang for the buck,” he said.
France’s CAC40 advanced for a third day, following indications that Marine Le Pen’s Rally National party is unlikely to have an absolute majority in this weekend’s second-round election.
However, regardless of which party comes out on top in the French parliamentary vote, some investors are betting it marks the start of a more turbulent period for the country’s stock and bond markets. The CAC 40 has been the worst performer among major European stock indexes since snap elections were announced last month, while at the height of the sell-off, a metric of bond market risk rose to its highest level since the crisis. sovereign debt.
The biggest market focus on Friday is the US jobs numbers. Payrolls probably rose by 190,000 in June, a decline in hiring from the previous month, according to the median estimate in a Bloomberg survey. Average hourly earnings are likely to rise 3.9% from a year ago, the slowest in three years. The unemployment rate is seen holding at 4%, the highest level in more than two years.
“The US data will be very interesting for a couple of reasons – you see signs of a slowdown in the labor market, and the market right now seems to have taken it in stride because it raises the possibility of easier monetary policy it’s heading down the road,” said Richard Flax, chief investment officer at European digital wealth manager Moneyfarm.
On the policy front, New York Fed President John Williams said on Friday that while inflation has recently cooled toward the central bank’s 2% target, policymakers are still some way off their target.
“Inflation is now around 2-1/2%, so we’ve seen significant progress in bringing it down. But we still have a way to go to reach our 2% target on a sustained basis,” Williams said in prepared remarks for an event at the Reserve Bank of India in Mumbai. “We are committed to getting the job done .”
In Asia, the Chinese extended their slide to a seventh straight week – the longest losing streak since early 2012 – as investor sentiment continues to weaken ahead of a key policy meeting this month. China’s central bank took the next step toward selling government bonds to calm a record surge, saying it now has “hundreds of billions” of securities available through deals with lenders.
The Japanese yen strengthened for a second day against the greenback to recover further from its lowest level since 1986 hit on Wednesday.
Oil traded near two-month highs as Hurricane Beryl forecast a potentially worse storm season, while shrinking US crude inventories hinted at improving demand. Gold headed for a consecutive weekly gain.
This week’s highlights:
Some of the main movements in the markets:
INVENTORY
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S&P 500 futures were little changed as of 7:19 a.m. New York time
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Nasdaq 100 futures rose 0.2%
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Dow Jones Industrial Average futures were little changed
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Stoxx Europe 600 rose 0.3%
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The MSCI World Index was little changed
currencies
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The Bloomberg Dollar Spot Index fell 0.1%
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The euro rose 0.1% to $1.0823
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The British pound rose 0.2% to $1.2788
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The Japanese yen rose 0.3% to 160.81 per dollar
Cryptocurrencies
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Bitcoin fell 5.2% to $55,281.37
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Ether fell 6.6% to $2,934.88
BONDS
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The 10-year Treasury yield fell three basis points to 4.33%
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Germany’s 10-year yield fell two basis points to 2.59%
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Britain’s 10-year yield fell four basis points to 4.16%
wares
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West Texas Intermediate crude was little changed
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Spot gold rose 0.3% to $2,364.43 an ounce
This story was produced with the help of Bloomberg Automation.
–With assistance from Richard Henderson, Joe Easton and Sagarika Jaisinghani.
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