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Bumper week for shares, oil and euro as payrolls due

Published 02/06/2015, 07:38 AM
© Reuters. Traders are pictured at their desks in front of the DAX board at the Frankfurt stock exchange
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By Marc Jones

LONDON (Reuters) - World shares were heading for their strongest week since October as markets awaited U.S. jobs data on Friday, while oil was shooting for a near 20 percent rebound and the euro was gunning for its biggest weekly rise since late 2013.

European stocks (FTEU3) dipped ahead of the data and the region's bonds made ground as investors, who have faced fluctuating sentiment over Greece's problems this week, squared up positions.

Economists polled by Reuters expected U.S. employers to have taken on 234,000 workers in January, below December's increase of 252,000, but more than enough to keep the three-month average the Federal Reserve likes to look at above the 200,000 mark.

"Traders will be hoping for a Goldilocks number just above 200k, showing that the U.S. economy is ticking over nicely, but not roaring ahead, as to invoke the Fed to start tightening (raising interest rates)," Jonathan Sudaria, a dealer at Capital Spreads, said in a note.

The dollar (DXY) nudged up against the main world currencies as the payrolls, due at 1330 GMT (08:30 a.m. EST), approached although it was more noteworthy that it was heading for its first weekly fall in eight weeks.

Early Wall Street futures prices pointed to a slightly higher open for the main New York boards .

Traders in most asset classes were keeping moves tight, as is standard ahead of payrolls data -- not wanting to be caught off-guard if the figures come in way outside the range of expectations.

Many were also just happy to catch their breath after a roller coaster start to the year, which has seen the European Central Bank fire over a trillion euros at the euro zone and central banks around the world make some jarring policy changes.

The euro <EUR/USD> hovered at $1.1450 as it looked to cling on to a 1.45 percent weekly gain, which would be its best since September 2013. And that was despite Greece's debt wranglings with the euro zone causing some big swings this week.

Those worries were underscored on Thursday when German Finance Minister Wolfgang Schaeuble said he had been unable to find common ground with his Greek counterpart over plans by the new government in Athens to renegotiate Greece's debts and halt austerity measures.

"We were both friendly and polite ... He told me his position, which he has repeatedly said in recent days, and I tried to explain our position to him and we were not able to bridge the differences," Schaeuble said.

After being battered almost constantly in recent months, Greek stocks have rebounded 12 percent this week and the country's bonds have had their strongest in almost two years.

HOT OIL

Oil, another of the global investment benchmarks like the euro that nosedived at the end of last year, was also heading for another bumper week as were Russian stocks (IRTS) and growth-attuned metal copper.

Benchmark Brent crude futures were $1.70 higher on the day at $58.28 a barrel and U.S. crude was also up $1.5 at $52.50 a barrel. Brent has gained almost 20 percent since last Friday and is on its strongest two-week run since 1998. [O/R]

Despite the surge, growing numbers of OPEC members say they expect no rapid recovery back to the $100 a barrel level. Late on Thursday top producer Saudi Arabia cut its monthly prices for Asian buyers again.

The U.S. payrolls data is also expected to show the jobless rate staying at a 6-1/2-year low of 5.6 percent, while average hourly earnings are forecast to rise 0.3 percent having fallen 0.2 percent in December.

U.S. Treasury yields (US10YT=RR) were steady although it was mostly time-filling ahead of the jobs figures.

Investors are hoping they could provide further clues as to when the Federal Reserve might raise interest rates. It is currently hinting at around the middle of the year but markets still suspect it could shift the move back somewhat.

"In December, these had recorded a surprise fall which suggests we could see a countermove in January. If the wage data disappoints the going will get tough for the dollar," said Esther Reichelt, currency strategist at Commerzbank.

Asian trading had been largely uneventful. MSCI's broadest index of Asia-Pacific ex-Japan (MIAPJ0000PUS) ended flat with a weekly gain of more than 1 percent, the Nikkei in Tokyo (N225) saw a slight weekly loss, while most Asian currencies notched gains.

© Reuters. Traders are pictured at their desks in front of the DAX board at the Frankfurt stock exchange

China's shares, last year's star performers continued to struggle. The CSI300 index (CSI300) of the largest listed companies in Shanghai and Shenzhen fell 1.6 percent and lost 3.5 percent on the week, while the Shanghai Composite (SSEC) fell more than 4 percent for a second successive week.

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