(Bloomberg) — As traders turn their attention toward Friday’s crucial US jobs data, global equities are scaling record highs.
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In Japan, the Topix index briefly touched another record early Friday, having surpassed the previous high set in 1989 in Thursday’s session. Korean stocks jumped after Samsung earnings beat estimates. UK equity-index futures rose and the pound held recent gains after the Labour Party won a majority of seats in Parliament, giving it a clear mandate to deliver on its pledge for greater economic stability.
China’s central bank took the next step toward selling government bonds to cool a record-breaking rally, saying it now has “hundreds of billions” of yuan of the securities at its disposal through agreements with lenders.
A gauge of global stocks soared to a record high, driven by a series of soft US economic data which has revived hopes for the Federal Reserve to start cutting interest rates as soon as September. The monthly payrolls report later 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 payroll report could be increasingly decisive for the Fed as it seeks a rationale to signal an easing of rates,” said Quincy Krosby, chief global strategist for LPL Financial.
Emerging market equities also benefited as the MSCI Emerging Markets Index rose to a two-year high on Thursday. European shares rallied, led by French equities, following indications that Marine Le Pen’s National Rally party will likely fall short of an absolute majority in second-round elections this weekend.
The yen strengthened for a second day on Friday against the greenback to rebound further from the lowest level since 1986 reached on Wednesday. An index of dollar strength fell for a fourth day as developing-world currencies were broadly higher.
The pound continued its run of strengthening that began last week. Labour Party passed 326 of the 650 seats in the House of Commons, securing its long-predicted landslide election victory. Rishi Sunak conceded defeat and Keir Starmer is now set to become prime minister.
In Asia, Chinese stocks are on pace 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 May-June macro data and feedback from companies mostly 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 Plenum, China’s Big Policy Meeting
Meanwhile, Treasury yields were little changed after resuming trading in Asia after the US July 4 holiday. Australian and New Zealand yields were similarly flat.
Oil traded near a two-month high as Hurricane Beryl portended a potentially worse storm season, while shrinking US crude stockpiles hinted at improved demand. Gold headed for a back-to-back weekly gain. Bitcoin fell to the lowest levels since February.
Key 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 speaks, Friday
Some of the main moves in markets:
Stocks
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S&P 500 futures were little changed as of 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 was little changed 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
Cryptocurrencies
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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 Treasuries was little changed at 4.36%
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Japan’s 10-year yield declined one basis point to 1.070%
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Australia’s 10-year yield declined one basis point to 4.40%
Commodities
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West Texas Intermediate crude 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 assistance of Bloomberg Automation.
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