HK stocks set for greatest weekly performance in 4 months

Yen at 2 month high up on rising bets on rate walkings this year

Gold consistent 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 investors thought about prospects that a broader trade war might be averted, while the yen hit its greatest in nearly 2 months on rising odds of more rate walkings in Japan this year.

In a week that began with U.S. Trump kicking off a trade war, financiers have actually been reluctant in making significant relocations as threatened duties on China were implemented.

Beijing's measured tit-for-tat response has actually left space for settlements, analysts state, and that has actually enabled traders to focus on the AI theme in China in the wake of home-grown start-up DeepSeek's breakthrough.

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 earnings.

European stocks have staged their finest efficiency in a years against Wall Street in the very first 6 weeks of 2025, however 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 eased 0.21%.

Futures for Nasdaq and S&P 500 were down about 0.2% as shares of Amazon insinuated extended trading over night on weak point in the retailer's cloud computing unit and soft forecast.

In Asia, Hong Kong's Hang Seng Index struck a three-month high, poised for a 4% increase in the week, its greatest weekly efficiency 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 substantial noise and uncertainty, we don ´ t see escalating trade tensions as a 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 but the domestic economy."

On the financial front, jobless claims, layoffs and labour costs/productivity provided a prologue to Friday's acutely awaited January work report, with the data likely to show the effect of wild fires in California and winter throughout much of the nation.

Nonfarm payrolls are anticipated to have actually increased by 170,000 tasks last month after surging 256,000 in December, a Reuters survey of economic experts showed.

"Markets could deal with some volatility around the data if it beats expectations, however it won't alter the course of the FOMC policy as more information will be needed," said Anderson Alves, a trader with ActivTrades.

Markets are pricing in 43 basis points of easing this year from the Fed with a rate cut in July completely priced in as policymakers remain in no rush to begin the rate-cutting cycle again.

While political uncertainties kept investors careful, worries have actually relieved that Trump's technique to tariffs might escalate into a worldwide trade war.

RISING YEN

The Japanese yen has actually been on a tear today buoyed by safe-haven circulations in addition to increasing expectations of the Bank of Japan increasing rates of interest this year, dokuwiki.stream 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 however was last a tad weaker at 151.71. The currency is headed for an over 2% increase against the dollar today, its greatest weekly efficiency since late November.

Sterling was 0.1% lower at $1.24255 after dropping 0.5% on Thursday as the BoE cut rates of interest by 25 basis points however cautioned it would be mindful moving forward, in the face of a prospective inflation uptick and geopolitical concerns.

Oil rates increased partially on Friday however were on track for a 3rd straight week of decline.

Gold prices 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; editing by Shri Navaratnam and Sam Holmes)