Published : 2 days ago, on 06/12/2024

By Iain Withers and Stella Qiu

LONDON/SYDNEY (Reuters) -Investors awaited U.S. payrolls data on Friday to see if it challenged or cemented expectations of a Federal Reserve rate cut this month, while the euro stumbled towards a flat week versus the dollar as France was gripped by political turmoil.

European stocks edged up 0.2% after market open, while Britain’s FTSE 100 dipped 0.1%, as investors digested news that insurer Aviva had agreed to buy rival Direct Line for 3.6 billion pounds ($4.6 billion).

Investors were training their sights on the crucial U.S. payrolls report due later in the day. U.S. stock futures were broadly flat ahead of Wall Street open.

Forecasts are centred on a rise of 200,000 jobs in November, rebounding from a soft 12,000 gain in October when the result was impacted by hurricanes and strikes. Futures markets put a 68% chance on a rate cut by the Fed on Dec. 18.

“It’s going to be very closely watched … If we don’t get a big surprise around that jobs number, I think the market will pretty much take the fact the Fed will cut again in its meeting,” said Shaneel Ramjee, senior investment manager at Pictet.

The Aviva swoop on Direct Line in Britain was further evidence of a pick-up in dealmaking across markets, Ramjee added. “Throughout both Europe and the U.S., these deals are starting to get done, and that just means more activity in the economy,” he said.

In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan reversed earlier losses to be up 0.2% thanks to a rally in Chinese shares, making up for investor caution around political ructions in South Korea.

Chinese shares had climbed to three-week highs as investors scooped up technology shares ahead of a top-level policy meeting next week that will set the agenda and targets for China’s economy next year.

The risk premium investors demand to hold French debt rather than German Bunds dropped to a new two-week low on Friday, after President Emmanuel Macron said he would appoint a new prime minister soon to get a 2025 budget approved by parliament.

The euro had rallied on Thursday, on market relief that France had avoided a more volatile political outcome for now. The euro was broadly flat on the day and the week at $1.0586.

BITCOIN REVERSAL

Bitcoin, which hit the $100,000 mark for the first time as investors bet on a friendly U.S. regulatory shift, ran into profit-taking. It tumbled as far as $92,092 and was last down 0.7% on the day at $98,288.

“This spike in volatility over the last 24 hours has the hallmarks of a classic blow-off top,” said Tony Sycamore, analyst at IG.

“While we don’t see this as the end of the Bitcoin bull run, it does signal we are entering a consolidation phase in the days/weeks ahead.”

In the foreign exchange market, the U.S. dollar index was broadly unchanged at 105.78, and remained pinned near three-week lows.

Treasuries were mostly steady on Friday. The two-year yield held at 4.16%, while 10-year benchmark Treasury yields were flat at 4.178%.

Oil prices fell as the decision from OPEC+ to delay a planned hike in output to April highlighted concerns about weak demand. Brent and U.S. crude futures both fell 1% to $71.35 and $67.59 a barrel respectively. [O/R]

Gold prices inched higher on Friday, up 0.3% to $2,639 per ounce, but were headed for a second straight week of declines.

($1 = 0.7836 pounds)

(Reporting by Iain Withers in London and Stella Qiu in Sydney; Editing by Sonali Paul, Sam Holmes, David Evans and Frances Kerry)