HK stocks set for strongest weekly efficiency in 4 months

Yen at two month high on increasing bets on rate walkings this year

Gold stable near record peak, oil set for 3rd weekly drop

By Ankur Banerjee

SINGAPORE, Feb 7 (Reuters) - Global stocks meandered on Friday ahead of key U.S. payrolls data as investors thought about prospects that a wider trade war might be avoided, while the yen struck its highest in almost 2 months on increasing chances of more rate walkings in Japan this year.

In a week that began with U.S. President Donald Trump kicking off a trade war, financiers have actually been hesitant in making significant moves as threatened responsibilities on China were implemented.

Beijing's measured tit-for-tat reaction has left room for settlements, analysts state, wiki.dulovic.tech and that has permitted 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 subdued open after the pan-European STOXX 600 index closed at a record high on Thursday on the back of robust company revenues.

European stocks have actually staged their finest performance in a decade against Wall Street in the 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 overnight on weak point in the retailer's cloud computing system and soft projection.

In Asia, Hong Kong's Hang Seng Index struck a three-month high, poised for a 4% rise 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 highest since mid-December.

"Whilst there is substantial noise and uncertainty, we wear ´ t see intensifying trade tensions as a game changer in the prospects for the Chinese market," said James Cook, investment director for emerging markets at Federated Hermes.

"China's larger issue is not Trump however the domestic economy."

On the financial front, unemployed claims, layoffs and labour costs/productivity offered a prologue to Friday's acutely awaited January employment report, with the data most likely to reveal the effect of wild fires in California and winter throughout much of the country.

Nonfarm payrolls are anticipated to have increased by 170,000 tasks last month after rising 256,000 in December, larsaluarna.se a Reuters survey of economists revealed.

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

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

While political uncertainties kept investors cautious, fears have eased that Trump's method to tariffs might into an international trade war.

RISING YEN

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

The yen touched 150.96 per dollar in early trading, its strongest level considering that December 10 however was last a little weaker at 151.71. The currency is headed for an over 2% increase against the dollar this week, its strongest weekly efficiency given that late November.

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

Oil rates increased partially on Friday but were on track for a third straight week of decrease.

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

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