Global stocks headed for their first in three weekly gain amid soaring commodity prices, as traders prepared to release a key US jobs report later on Friday, which could provide clues as to when the Federal Reserve will relax on monetary stimulus.
MSCI’s benchmark for global equity markets (.MIWD00000PUS), which tracks stocks from 50 countries, edged up around 0.1%, on track for a 0.4% gain this week.
Its largest Asia-Pacific stock index outside of Japan (.MIAPJ0000PUS) rose around 0.4% on Friday, with China’s blue chips (.CSI300) and Japan’s Nikkei (.N225) each gaining about 0.3%.
Aluminum prices approached levels last seen in 2018 and copper has flirted with 10-year peaks, with investors betting on a rapid global recovery from the US-led pandemic.
Overnight, Wall Street investors piled into economically sensitive stocks on reflation trade, leading the Dow Jones Industrial Average to a record close on Thursday.
The Dow (.DJI) was up 0.9%, the S&P 500 (.SPX) 0.8% and the Nasdaq Composite (.IXIC) 0.4%.
Futures on S&P showed further gains, up 0.2% on Friday.
U.S. stocks rebounded, led by financiers and industrials, after a report showed the number of Americans filing new unemployment benefits fell below 500,000 last week for the first since start of the COVID-19 pandemic, signaling that the labor market recovery has entered a new phase amid a booming economy. Read more
The Russell 1000 Value Index (.RLV) gained 0.8%, ahead of the Russell 1000 Growth Index (.RLG), which rose 0.5%.
The focus is now on Friday’s report on the non-farm payroll, with estimates ranging from 700,000 to more than 2 million jobs created in April.
“Prepare for the salaries, they could be huge,” Chris Weston, head of research at broker Pepperstone in Melbourne, wrote in a note to clients.
“The product space is the talk” and financial data is the “bull game” that goes into the payroll report, he said.
The safe-haven dollar fell to its lowest level this week against a basket of major peers on Friday ahead of the jobs report as firmness in global equity markets boosted risk appetite.
The dollar index fell to 90.837 and was on track for a 0.4% decline this week.
Treasury yields hovered near this month’s low on Friday, removing further support from the greenback, after bond traders largely ignored initial data from better-than-expected jobless claims and waited for the non-farm payroll report indicates the direction of the market.
The 10-year Treasury bill fell 1.5714% at the start of the Asian session.
Gold was heading for a weekly gain of 2.5%, the highest since December, as dollar weakness and easing Treasury yields propelled the precious metal, an inflation hedge, above from the key psychological level of $ 1,800 an ounce to trade at $ 1,813.54.
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