HK stocks set for strongest weekly performance in 4 months

Yen at 2 month high up on increasing bets on rate walkings this year

Gold constant near record peak, oil set for third weekly drop

By Ankur Banerjee

SINGAPORE, Feb 7 (Reuters) - Global stocks meandered on Friday ahead of essential U.S. payrolls information as investors thought about prospects that a wider trade war could be prevented, while the yen struck its highest in nearly 2 months on rising chances of more rate walkings in Japan this year.

In a week that began with U.S. President Donald Trump kicking off a trade war, financiers have actually been reluctant in making significant relocations as threatened duties on China were carried out.

Beijing's measured tit-for-tat response has actually left space for negotiations, experts say, which has actually allowed traders to focus on the AI style in China in the wake of home-grown start-up DeepSeek's development.

European futures indicated a subdued open after the pan-European STOXX 600 index closed at a record high on Thursday on the back of robust company incomes.

European stocks have actually staged their finest performance in a years against Wall Street in the very first 6 weeks of 2025, but focus is now on whether those gains can be sustained.

Eurostoxx 50 futures were down 0.41%, while FTSE futures fell 0.39%. DAX futures eased 0.21%.

Futures for Nasdaq and S&P 500 were down about 0.2% as shares of Amazon slipped in prolonged trading overnight on weak point in the retailer's cloud computing unit and soft projection.

In Asia, Hong Kong's Hang Seng Index struck a high, poised for a 4% rise in the week, its greatest weekly performance sustained by DeepSeek-led AI bets.

China's blue-chip stock index was 0.4% greater after touching a one-month high leaving MSCI's broadest index of Asia-Pacific shares outside Japan at its greatest since mid-December.

"Whilst there is substantial sound and uncertainty, we put on ´ t see escalating trade tensions as a game changer in the potential customers for the Chinese market," said James Cook, financial investment director for imoodle.win emerging markets at Federated Hermes.

"China's larger problem is not Trump however the domestic economy."

On the economic front, out of work claims, layoffs and labour costs/productivity offered a beginning to Friday's acutely awaited January work report, with the information likely to reveal the impact of wild fires in California and cold weather condition throughout much of the nation.

Nonfarm payrolls are anticipated to have actually increased by 170,000 jobs last month after rising 256,000 in December, a Reuters survey of economists showed.

"Markets might face some volatility around the information if it beats expectations, however it won't change the path of the FOMC policy as more information will be required," said Anderson Alves, a trader with ActivTrades.

Markets are pricing in 43 basis points of reducing this year from the Fed with a rate cut in July completely priced in as policymakers remain in no rush to begin the rate-cutting cycle again.

While political uncertainties kept investors careful, worries have actually eased that Trump's approach to tariffs might escalate into a global trade war.

RISING YEN

The Japanese yen has actually been on a tear this week buoyed by safe-haven circulations along with increasing expectations of the Bank of Japan increasing interest rates this year, with market value in 34 basis points of walkings for the year.

The yen touched 150.96 per dollar in early trading, its greatest level because December 10 but was last a little bit weaker at 151.71. The currency is headed for an over 2% rise against the dollar this week, its greatest weekly performance given that late November.

Sterling was 0.1% lower at $1.24255 after dropping 0.5% on Thursday as the BoE cut interest rates by 25 basis points however warned it would beware going forward, in the face of a prospective inflation uptick and geopolitical concerns.

Oil prices rose partially on Friday but were on track for a third straight week of decline.

Gold rates steadied on Friday near record-high levels and were headed for their 6th successive weekly gain driven by safe-haven circulations.

(Reporting by Ankur Banerjee; additional reporting by Stephen Culp, Marc Jones and Alun John; editing by Shri Navaratnam and Sam Holmes)