Energy stocks rallied, leading a third day of gains for European equities as crude prices bounced. Treasuries flirted with the longest losing streak in more than four decades before a U.S. jobs report expected to bolster the case for a rate hike next week.
The yield on 10-year U.S. Treasuries fluctuated before edging higher for a 10th day, the longest streak since 1974. Crude’s advance from a three-month low wasn’t enough to climb above $50 a barrel, but it boosted oil and energy shares in Europe. Gold slid below $1,200 per ounce, dropping for a fifth day, its longest losing run since October.
Friday’s American jobs report is the last major piece of economic data before the Federal Reserve meets next week, with markets pricing a rate increase as a near certainty. In Europe, while the ECB stuck by its planned stimulus and forward guidance on Thursday, President Mario Draghi acknowledged the upbeat economic outlook by adding later that it’s less likely that rates will have to be cut, and that there’s no longer a “sense of urgency” in monetary policy.
“Disappointment this afternoon seems very unlikely,” Vincent Juvyns, global market strategist at JPMorgan Asset Management, told Bloomberg Radio’s Nejra Cehic. “All the data point toward a Fed rate hike in March. We might see some repricing downwards if we have a weak report. A very strong report could make the case for four rate hikes this year. The market is adjusting itself for the reflation theme which is day by day getting more traction.”
What’s ahead for markets:
- Official U.S. jobs data for February are due Friday. Employers probably added around 200,000 workers to payrolls, in line with the average over the past six months and a sign of steady growth, economists forecast.
Here are the main market moves:
Currencies
- The Bloomberg Dollar Spot Index dropped 0.1 percent as of 9:46 a.m. in London.
- South Korea’s won was up less than 0.1 percent following stronger initial gains that came after the country’s president was ousted. The ruling triggers a presidential election within 60 days.
Stocks
- The Stoxx Europe 600 Index rose 0.4 percent, as the FTSE 100 gained 0.4 percent.
- Futures on the S&P 500 added 0.3 percent.
Bonds
- The yield on the U.S. Treasury note due in a decade was up fractionally at 2.61 percent. It climbed five basis points Thursday to exceed the 2.6 percent mark that Bill Gross, the bond-market veteran at Janus Capital Management, said will signal the start of a bear market, should it hold on a weekly basis.
Commodities
- WTI crude was up 0.8 percent at $49.66 per barrel. It fell 2 percent on Thursday to the lowest close since Nov. 29.
- Gold fell 0.3 percent to $1,197.33 per ounce.
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