European stocks head for 7th weekly gain

Yen at two-month high on rate trek bets

Gold stable near record peak

By Amanda Cooper

LONDON, Feb 7 (Reuters) -

U.S. stock futures steadied on Friday ahead of U.S. payrolls information, with financiers meticulously optimistic that the world might avoid a full-on trade war, while the possibility of more rate walkings in Japan this year briefly sent out the yen towards two-month highs.

In a week that started with U.S. President Donald Trump kicking off a trade war and whipping up market volatility, investors have actually watched out for making any major relocations, provided that he followed through on his threat to impose duties on China while approving Mexico and Canada a one-month reprieve.

The all-important U.S. tasks report for January is due ahead of the Wall Street open. Economists anticipate to see 170,000 employees added to nonfarm payrolls last month, however provided the possible distortions from spells of winter and the California wildfires, the variety of projections is wide.

"The focus for the monetary markets in current weeks has actually been very much on Trump and his financial policies, in specific on trade, but today there is the capacity for the jobs data to affect Fed rate expectations," Derek Halpenny, a currency strategist at MUFG, said.

"A quite large divergence from the agreement is still most likely required to shift expectations notably however extreme weather condition at this time of the year has in the past resulted in greatly weaker NFP readings and weather condition might affect today ´ s report," he said.

Futures on the Nasdaq and S&P 500 were trading mainly consistent on the day, while shares of

Amazon

insinuated premarket trading on the back of

weakness

in the retailer's cloud system.

In Europe, the STOXX 600 headed for a seventh straight week of gains, trading flat on the day after having actually hit record highs earlier today, following a spate of from the similarity Danish weight-loss drugmaker Novo Nordisk, German software business SAP and French loan provider BNP Paribas.

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

On the Asian market, tech stocks staged a rally, powered by Chinese retail financiers, who have caught the AI theme in the wake of home-grown start-up DeepSeek's breakthrough.

DELICATE CHINA

Beijing's seemingly determined action to Trump's tariffs has left space for settlements, experts say, which has helped repair investor sentiment.

China's blue-chip stock index closed up 1.3% after touching a one-month high.

"Whilst there is substantial noise and uncertainty, we do not see intensifying trade tensions as a video game changer in the prospects for the Chinese market," said James Cook, financial investment director for emerging markets at Federated Hermes.

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

The dollar edged up 0.1% against a basket of currencies, library.kemu.ac.ke having actually rallied 7% in 2015, as investors priced in an even more aggressive policy stance from the Fed this year, where rate cuts may be rare.

Other main banks are cutting interest rates, while the Bank of Japan is tailoring up for at least another rate hike this year. Strong wage development information has actually boosted the chances of tighter monetary policy, which has actually pressed the yen to two-month highs against the dollar.

The yen touched 150.96 per dollar overnight, its greatest level considering that December 10, before alleviating to leave the dollar up 0.4% on the day at 152.155.

Sterling reversed earlier losses to rise 0.1% to $1.2449, having dropped 0.5% on Thursday as the BoE cut rate of interest and slashed its 2025 UK growth forecast.

In commodities, oil edged up, while gold steadied above $2,800 an ounce, near tape-record highs.

(Additional reporting by Ankur Banerjee in Singapore; additional reporting by Stephen Culp, Marc Jones and Alun John; editing by Shri Navaratnam, Sam Holmes, Gareth Jones and Angus MacSwan)