Photo credit: finance.yahoo.com
Global Financial Markets Await Key U.S. Payrolls Data Amid Political Turbulence in France
LONDON/SYDNEY (Reuters) – Investors are closely monitoring the upcoming U.S. payrolls report, anticipating whether it will affirm or modify expectations surrounding a potential Federal Reserve interest rate cut this month. Concurrently, the euro is facing challenges, culminating in a relatively stagnant week against the dollar, largely attributed to ongoing political instability in France.
European stock markets showed slight gains of 0.3% following the market opening. The FTSE 100 in Britain remained largely unchanged, hindered by a 0.6% decline in Aviva’s shares after its announcement of a £3.6 billion ($4.6 billion) acquisition of competitor Direct Line.
Attention is now directed towards the significant U.S. payrolls data expected later today, with U.S. stock futures indicating a largely stable outlook ahead of Wall Street’s opening bell.
Analysts predict an increase of 200,000 jobs in November, rising from a modest gain of 12,000 in October, which was influenced by severe weather events and strikes. Market expectations assign a 67% probability to a rate cut by the Fed on December 18.
Shaneel Ramjee, a senior investment manager at Pictet, emphasized the importance of the upcoming jobs report, stating, “It’s going to be very closely watched… If we don’t get a significant surprise in the jobs number, the market will likely assume that the Fed will proceed with a rate cut in its next meeting.”
Ramjee also highlighted the rising trend in corporate mergers and acquisitions, citing Aviva’s move as indicative of heightened economic activity in both Europe and the U.S.
In the Asia-Pacific region, MSCI’s broad index excluding Japan reversed previous declines, gaining 0.2%, driven by a rebound in Chinese stocks despite growing investor unease over political developments in South Korea.
Chinese shares reached three-week highs as investors seized opportunities in technology stocks ahead of an important policymaking meeting expected next week that will outline economic objectives for China in the coming year.
Meanwhile, the risk premium associated with French debt over German Bunds declined to a new two-week low following President Emmanuel Macron’s announcement of a forthcoming appointment of a new prime minister to facilitate the approval of the 2025 budget in parliament.
Though the euro experienced a rally on Thursday amid relief over France’s political situation, it fell by 0.2% today, trading at $1.057275, resulting in an overall flat performance for the week.
Bitcoin Price Volatility
Bitcoin recently achieved a historic milestone, crossing the $100,000 threshold, as investors speculated on favorable regulatory developments in the U.S. However, the cryptocurrency then experienced a noteworthy retreat, plummeting to as low as $92,092, with its current trading status showing a decrease of 0.7%, landing at $98,334.
Analyst Tony Sycamore from IG noted, “This spike in volatility over the last 24 hours has the hallmarks of a classic blow-off top. While we don’t view this as the conclusion of the Bitcoin bull run, it does indicate we are entering a consolidation phase in the days and weeks to come.”
In the foreign exchange market, the U.S. dollar index incrementally rose by 0.2%, reaching 105.87, but remained close to its three-week lows.
Treasury yields displayed little movement on Friday, with the two-year yield steady at 4.1662% and the ten-year benchmark yield remaining unchanged at 4.1857%.
Oil prices faced declines as OPEC+ decided to postpone a planned output increase until April, raising concerns over insufficient demand. Brent crude futures decreased by 0.5% to $71.71, and U.S. West Texas Intermediate crude futures also fell by 0.5% to $67.97 per barrel.
Gold prices saw a slight increase of 0.4% to $2,641 per ounce, although they were on track for a second consecutive week of declines.
($1 = 0.7836 pounds)
Source
finance.yahoo.com