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HK stocks set for strongest weekly performance in 4 months

Yen at two month high on rising bets on rate hikes 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 key U.S. payrolls data as financiers thought about potential customers that a wider trade war could be prevented, while the yen struck its highest in nearly 2 months on increasing odds of more rate hikes in Japan this year.

In a week that started with U.S. President Donald Trump beginning a trade war, financiers have been reluctant in making major moves as threatened duties on China were implemented.

Beijing's determined tit-for-tat reaction has actually left space for negotiations, analysts say, and that has actually enabled traders to concentrate on the AI theme in China in the wake of home-grown start-up DeepSeek's development.

European futures indicated a controlled open after the pan-European STOXX 600 index closed at a record high on Thursday on the back of robust company incomes.

European stocks have actually staged their best efficiency in a decade against Wall Street in the very first six weeks of 2025, but focus is now on whether those gains can be sustained.

Eurostoxx 50 futures were down 0.41%, oke.zone while FTSE futures fell 0.39%. DAX futures reduced 0.21%.

Futures for Nasdaq and S&P 500 were down about 0.2% as shares of Amazon slipped in prolonged trading over night on weakness in the retailer's cloud computing unit 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% higher after touching a one-month high leaving MSCI's broadest index of Asia-Pacific shares outside Japan at its greatest given that mid-December.

"Whilst there is considerable sound and uncertainty, we put on ´ t see intensifying trade tensions as a video game changer in the potential customers for the Chinese market," said James Cook, financial investment director for emerging markets at Federated Hermes.

"China's bigger problem is not Trump but the domestic economy."

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

Nonfarm payrolls are expected to have increased by 170,000 jobs last month after rising 256,000 in December, a Reuters poll of economists revealed.

"Markets could deal with some volatility around the information if it beats expectations, however it will not change the course of the FOMC policy as more information will be required," said Anderson Alves, a trader with ActivTrades.

Markets are pricing in 43 basis points of relieving 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 careful, fears have actually eased that Trump's technique to tariffs could intensify into a global trade war.

RISING YEN

The Japanese yen has been on a tear today buoyed by safe-haven circulations as well as rising expectations of the Bank of Japan increasing rates of interest this year, with markets pricing in 34 basis points of walkings for the year.

The yen touched 150.96 per dollar in early trading, its greatest level because December 10 but was last a tad weaker at 151.71. The currency is headed for an over 2% rise against the dollar today, its greatest weekly efficiency given that late November.

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

Oil rates rose partially on Friday but were on track for surgiteams.com a 3rd straight week of decrease.

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

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

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