European equity contracts saw a slight uptick as traders searched for additional indications of a cooling US labor market, aiming to gain insights into the upcoming Federal Reserve policy meeting next week.
Euro Stoxx 50 futures experienced a 0.2% increase, setting the stage for regional equities to achieve a fourth consecutive week of gains. Contracts on the S&P 500 and Nasdaq 100 underwent minimal changes. Meanwhile, in Asia, Indian stock benchmarks, already at record highs, extended their gains following the central bank’s anticipated decision to maintain its unchanged rate.
The resolution of the United Auto Workers strike in the US is expected to strengthen November’s nonfarm payrolls.
The dollar showed mixed performance against major peers, while Treasuries remained relatively steady. Simultaneously, the yen strengthened for a second consecutive day amid growing speculation that the Bank of Japan is nearing the end of its negative interest rate policy. Although the Japanese currency briefly surged by as much as 1.1%, it mostly retraced its gains, leading to a decline in the nation’s stocks and bonds.
Traders are eagerly awaiting clarification from BOJ Governor Kazuo Ueda regarding his recent comments to lawmakers, which fueled speculation about the central bank potentially lifting its sub-zero benchmark rate soon. The yen reached its highest level since August as bets against the currency diminished.
However, some investors remain unconvinced that the BOJ will make significant policy shifts this month. The larger-than-expected contraction of Japan’s economy in the third quarter suggests a more delicate recovery, providing a potential reason for the central bank to postpone policy normalization.
In other parts of Asia, Hong Kong and China rebounded from earlier losses, and Tencent Holdings Ltd., China’s leading company, revealed a high-budget console game to bolster global expansion.
South Korean and Taiwanese stocks saw gains following a rally in the Nasdaq 100 index, driven by renewed optimism in artificial intelligence.
Commodities witnessed mixed fortunes, with oil advancing but remaining on track for its longest weekly losing streak since 2018 due to concerns about a global glut. Gold, on the other hand, was poised for its first weekly decline in four weeks.
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