Global stock markets wavered Friday as dealers awaited vital US jobs data and mulled the Federal Reserve’s readiness to hike interest rates aggressively.
London stocks edged higher in late morning deals, while Frankfurt nudged lower and Paris was flat nearing midday in the eurozone.
The dollar was under pressure before key US non-farm payrolls data, while oil advanced as traders eyed unrest in producer Kazakhstan.
Asia faced a mixed trading session after another round of losses on Wall Street.
World equities mostly sank Thursday after the Fed signaled this week that it was ready to tighten monetary policy more quickly to combat spiking inflation.
‘Apprehensive’ investorsÂ
“Investors remain apprehensive following the Federal Reserve’s move to a more hawkish stance, with the jobs report later providing further color to the economic backdrop,” said Richard Hunter, head of markets at Interactive Investor.
Eyes are now on the release of the closely watched non-farm payroll figures for December, which could impact the Fed’s decision on when and how quickly to lift rates.
A figure way above the forecast 447,000 new posts could force officials to take a more hawkish tilt, which would likely weigh further on equities.
The data release will “give an insight into the health of the world’s largest economy”, noted AJ Bell investment director Russ Mould.
He added: “A stronger-than-expected number might add to the impression given by the recently released minutes of the Fed’s latest meeting that rates are set to rise further and faster in the short term and provide another jolt to markets.”
Asian bourses were mixed Friday after this week’s volatile start to the New Year.
Minutes from the Fed’s December policy meeting showed that officials signaled a more aggressive rate-tightening path than previously flagged, arguing “it may become warranted to increase the federal funds rate sooner or at a faster pace than participants had earlier anticipated”.
There were also indications officials were considering reducing its massive bond holdings, putting further upward pressure on lending costs.
The Fed’s decision to remove the support put in place at the start of the pandemic comes as the world’s top economy continues to show resilience, with unemployment falling, despite supply chain snarls and rising energy costs that sent prices soaring.
There were also indications officials were considering reducing its massive bond holdings, adding upward pressure to lending costs — Treasury yields are set for their biggest weekly jump since 2020, according to Bloomberg News.
Bitcoin was also under pressure, falling for a second day to as low as $41,008, a level not seen since the end of September.