By Marc Jones and Stella Qiu
LONDON/SYDNEY, Sept 4 (Reuters) – World shares pushed higher ahead of U.S. jobs data on Friday, while bond markets got some much-needed relief after a top Federal Reserve official cooled rate-hike expectations and dragged the dollar lower.
The dollar’s retreat had run its course as the pre-payrolls doldrums set in, but it left the yen set for a weekly rise of 2.3% – its best since late July, when Japan and the U.S. conducted a rare joint intervention to halt a relentless slide in the Japanese currency.
Europe’s main stock markets [.EU] opened only fractionally higher, meanwhile, as renewed rises in both oil and the region’s gas prices bolstered ECB rate-hike bets. Nasdaq futures climbed 0.4% and S&P 500 futures rose 0.1%.
In remarks for a Reuters NEXT Newsmaker event, Federal Reserve Governor Christopher Waller said that recent data suggested some signs of disinflation and that, if upcoming reports reinforced that trend, he would favour holding rates steady at this month’s policy meeting.
Futures were quick to scale back the chance of a rate hike this month to just 50%, from about 63% a day ago. Those expectations had surged in recent sessions as a global bond rout drove long-dated yields to multi-year highs, fuelled by concerns over stubborn inflation, swelling government debt and geopolitical tensions.
“These Waller comments – that they are finally seeing some disinflation – suggest there is not a lot of coordination on the FOMC given what (Fed) Chair Kevin Warsh said last week,” Saxo Bank’s head of global macro strategy, John Hardy, said.
“The market was forced to mark down the chance of a move in September, at the same time if we get a big surprise on the jobs data especially on the downside we could get a lot of volatility.”
In Asia, MSCI’s broadest index of regional shares was ending its day up 0.8% and little changed for the week.
Japan’s Nikkei gained 1.3%, but was still down 1.9% for the week. Chinese blue-chips gave up earlier gains to end down 0.1% while South Korea’s tech-heavy KOSPI rose 1.6% but was still down for a third week running. It also came as the Korean won hit a 14-month high.
U.S. JOBS DATA LOOMSTraders are bracing for the U.S. payrolls report for August due later in the day. Forecasts are centred on a rise of 56,000 jobs after a shock fall of 23,000 the previous month. The unemployment rate is expected to hold steady at 4.1%.
U.S. economic data overnight showed activity in the services sector picked up pace last month with a measure of prices paid jumping to a three-year high. The Fed’s “Beige Book” survey also showed economic activity edged up in recent weeks.
