Business | Markets
Europe stocks gain and yen near 15-year high
Markets brace for possibility of more US job losses
- Reuters
- Published: 00:00 September 4, 2010
London: European stocks edged higher yesterday after US shares climbed, but the dollar struggled as markets braced for a key US labour report expected to show more job losses, clouding the outlook for recovery.
US non-farm payrolls likely took a hit from a combination of a fading boost from census hiring, companies' reluctance to hire staff and further layoffs at cash-strapped state and local governments.
Surprisingly strong US manufacturing data earlier this week had dispelled some gloom about faltering growth, but investors were far from convinced all is well.
The pan-European FTSEurofirst 300 index rose 0.5 per cent, on course for a rise of 3 per cent over the week. World stocks as measured by the MSCI were up 0.6 per cent, propped up by the gains in European and Asian shares.
"People are watching the growth in (US) private sector employment, which is likely to be too low to be good enough for the economy," said Bernard McAlinden, investment strategist at NCB Stockbrokers in Dublin.
"The market is going up on relatively unconvincing economic data. It just needs to know there won't be a double dip."
Underscoring simmering angst about US growth, the yen remained locked close to a 15-year high against the dollar and the Swiss franc near a record peak against the euro.
The US currency traded flat at 84.27 yen by 8:35 GMT, hovering in range of a 15-year low of 83.58 yen hit late last month.
Against a basket of currencies, the dollar was a touch lower on the day at 82.42.
Market participants said traders were short of dollars heading into the figures due at 12:30 GMT expected to show US non-farm payrolls fell 100,000 in August following a loss of 131,000 the previous month.
Fed speculation
"If the figure does not provide a massive surprise to the upside, it will support the market's view that the Fed will not raise rates for a very long time," said Ulrich Leuchtmann, currency strategist at Commerzbank in Frankfurt.
He added that this would also raise speculation the Federal Reserve may implement more quantitative easing to boost the economy, which would be negative for the dollar.
US Treasury debt prices were mostly steady in Europe with traders focused on whether jobs data would provide a catalyst for a further rebound in the benchmark 10-year yield from last week's 19-month low.
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