World markets steady ahead of key US jobs data

LONDON (AP) — World stock markets traded in narrow ranges Friday ahead of crucial U.S. jobs data that could help determine whether the U.S. Federal Reserve announces further stimulus measures to get the world's largest economy back on track after a run of disappointing indicators.

In Europe, the FTSE 100 index of leading British shares was up 18.56 points, or 0.4 percent, at 5,384.34 while Germany's DAX rose 5.92 points, or 0.1 percent, to 6,339.50. The CAC-40 in France was 7.97 points, or 0.2 percent, higher at 3,772.16.

Wall Street was poised for a fairly subdued opening — Dow futures were down 6 points at 10,629 while the broader Standard & Poor's 500 futures fell 0.3 point to 1,123.20.

How stocks end the week though will hinge on the July nonfarm payrolls data — the numbers often set the market tone for a week or two, particularly in August, when trading volumes slump, particularly in the U.S. and Europe.

"With global stock markets looking decidedly jittery in recent days, any slightly worse number could be enough of a catalyst to spark off selling ahead of the weekend," said Will Hedden, a sales trader at IG Index.

The consensus in the markets is that the U.S. economy shed around 65,000 jobs during July, though that figure will have been distorted by the fact that one-off census workers are no longer needed.

If the payrolls data come in below expectations then the markets will be on the lookout for additional measures to support the economy from the Fed, following recent hints from the likes of James Bullard, president of the Federal Reserve Bank of St. Louis.

"It is clear that today's release will set the tone in the run-up to next week's Fed meeting, with the market still divided on the risks of a U.S. double-dip and the appropriate Fed stance," said Daragh Maher, an analyst at Credit Agricole. "Payrolls may not have been able to dictate every move over the last few days, but they will most likely do today and for much of next week."

The impact of the data will be felt across all trading assets, with the dollar clearly in the spotlight.

By mid morning London time, the euro was down 0.1 percent, at $1.3178,

In currencies, the dollar rose to 86.09 yen from 85.87 yen in New York late Thursday. The euro rose to $1.3187 from $1.3181 — earlier this week it struck a three-month high of $1.3261 amid mounting expectations that the Fed will turn on the money taps once again following a raft of worse than expected U.S. economic data at a time when the newsflow out of Europe has been more encouraging than anticipated.

"In the event of a positive payrolls print, we expect dollar upside versus the euro and the yen but a disappointment would again see the Swiss franc and yen gain versus the dollar," said Gareth Berry, analyst at UBS.

Japan's benchmark Nikkei 225 stock index lost 0.1 percent to 9,642.12 while Hong Kong's Hang Seng was up 0.6 percent to 21,678.80.

South Korea's Kospi was little changed at 1,783.83. Markets in India, Thailand and Indonesia gained while Malaysia and Singapore dropped.

However, the Shanghai Composite Index rose 1.4 percent to 2,658.39 as investors mulled how much a slowdown in government spending and tighter monetary policy could cool China's economic growth.

Benchmark crude for September delivery was down 9 cents at $81.92 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 46 cents to settle at $82.01 on Thursday.


Associated Press Writer Alex Kennedy in Singapore contributed to this report.