European shares crept higher in early trading on Friday as major averages shoot for a third successive week of gains. The strength in equities is largely thanks to oil prices being back close to where they started the year but today’s gains were reinforced by the biggest rise in the fix for the Chinese yuan in three weeks. Still, caution before the US jobs figures has kept some investors on the sidelines.
The euro picked up strength after a report suggested a lack of consensus at the ECB before its policy meeting next week. The report from MNI cited ECB sources as saying the central bank was ready to make further cuts to the deposit rate but that there was indecision over other unconventional measures that could be taken to address the ongoing low inflation. The ECB appears to becoming more aware of excessive market expectations with one source suggesting people were looking for the ECB as a solve-all for everything including hiccups. There could be a genuine lack of consensus or this could be an effort by the ECB to rein in expectations in order avoid the kind of disappointment seen after it eased policy in December.
The stabilisation of the Chinese currency as well as efforts this week by authorities in China to bring down excess capacity in its commodities industries helped miners lead gains on the FTSE 100. A strong set of full-year results for the London Stock Exchange Group PLC (LON:LSE) increases the chance of a bidding war between rival exchanges and is helping shares stick to elevated levels.
US stocks look set to open with a positive bias but remain almost unchanged from yesterday’s close ahead of today’s US payrolls numbers. Expectations are for 195k jobs created in February and 0.2% growth in average earnings m/m. Assuming the jobs figure comes somewhere around 200k as it has done for the best part of two years, the focus will be on wages which have been sticky but are showing signs of moving higher this year.
USA pre-opening levels
S&P 500: unchanged at 1,993
Dow Jones: 10 points higher at 16,953
Nasdaq 100: 1 point higher at 4,326
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