HK stocks set for strongest weekly performance in 4 months

Yen at 2 month high on on rate hikes this year

Gold steady near record peak, oil set for 3rd weekly drop

By Ankur Banerjee

SINGAPORE, Feb 7 (Reuters) - Global stocks meandered on Friday ahead of key U.S. payrolls data as financiers thought about potential customers that a broader trade war could be averted, while the yen hit its highest in nearly two months on increasing chances of more rate hikes in Japan this year.

In a week that began with U.S. President Donald Trump beginning a trade war, financiers have been hesitant in making significant moves as threatened responsibilities on China were implemented.

Beijing's measured tit-for-tat response has left room for settlements, experts state, and that has permitted traders to concentrate on the AI theme in China in the wake of home-grown start-up DeepSeek's advancement.

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 business profits.

European stocks have staged their best performance in a decade against Wall Street in the first 6 weeks of 2025, however 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 relieved 0.21%.

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

In Asia, Hong Kong's Hang Seng Index struck a three-month high, astroberry.io poised for a 4% increase in the week, its strongest 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 considering that mid-December.

"Whilst there is significant sound and uncertainty, we put on ´ t see escalating trade tensions as a game changer in the prospects for the Chinese market," said James Cook, financial investment director for 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 prologue to Friday's keenly awaited January employment report, with the data most likely to show the impact of wild fires in California and cold weather throughout much of the country.

Nonfarm payrolls are expected to have actually increased by 170,000 tasks last month after rising 256,000 in December, forum.pinoo.com.tr a Reuters poll of economists revealed.

"Markets could deal with some volatility around the information if it beats expectations, but it will not alter the path of the FOMC policy as more information will be needed," said Anderson Alves, a trader with ActivTrades.

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

While political uncertainties kept investors wary, asteroidsathome.net fears have eased that Trump's technique to tariffs could escalate into an international trade war.

RISING YEN

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

The yen touched 150.96 per dollar in early trading, its greatest level given that December 10 however was last a little bit weaker at 151.71. The currency is headed for an over 2% rise against the dollar this week, its strongest weekly performance since 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 but alerted it would beware going forward, in the face of a possible inflation uptick and geopolitical concerns.

Oil prices increased partially on Friday but were on track for videochatforum.ro a 3rd straight week of decrease.

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

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