U.S. Futures, Europe Stocks Gain Before Jobs Data: Markets Wrap

(Bloomberg) --

U.S. stock futures and European shares edged higher Thursday in a lackluster session marked by thin trading volumes thanks to the American holiday. Brazilian stocks surged and the real gained as a congressional committee voted to advance the pension-reform bill. Gold slipped but stayed above $1,400 and WTI futures fell.

The Stoxx Europe 600 Index finished modestly higher, with real estate firms and banks lifting the gauge. Contracts on the S&P 500 Index also nudged up after Asia's benchmark finished higher overall thanks to gains in Japan and South Korea. Trading volumes were well below average across the board, with U.S. markets shut for the July 4 holiday and investors counting down to Friday's American jobs report.

Core European bonds climbed, with German 10-year yields sliding below the European Central Bank's deposit rate for the first time. Treasuries aren't trading thanks to Independence Day. The dollar was slightly lower in the wake of accusations from President Donald Trump that the European Union and China engage in currency manipulation, while the euro edged higher.

Thursday's holiday in the U.S. is giving many investors a breather after a hectic few weeks in which bonds surged and stocks hit records as they tracked every twist in the trade war, tried to second guess central bankers and analyzed every data point. Next up, a U.S. jobs report that will be closely monitored for clues on the Federal Reserve's next move.

“Friday's data is important to the extent that it will calibrate expectations for what the Fed could deliver later this month,” said Ned Rumpeltin, European head of FX strategy at Toronto-Dominion Bank in London. “It is more about confirming the market's current bias rather than setting fresh expectations.”

On the currency-war front, Trump in a Twitter post Wednesday said China and Europe are playing a “big currency manipulation game” and “pumping money into their system” to compete with the U.S. He said America should match their efforts “or continue being dummies” who watch other countries manipulate currencies.

Here are some key events coming up:

• U.S. equity markets close Thursday for the Independence Day holiday.
• The U.S. jobs report is due Friday and is projected to show non-farm payrolls rose by 160,000 in June, rebounding from 75,000 the month prior.

Here are the main moves in markets:

Stocks

• Futures on the S&P 500 Index increased 0.1% as of 4:24 p.m. New York time.
• The Stoxx Europe 600 Index gained 0.1%, reaching the highest in 12 months.
• The U.K.'s FTSE 100 Index decreased 0.1%, the first retreat in a week.
• The MSCI Asia Pacific Index rose 0.3% to the highest in two months.
• The MSCI Emerging Market Index jumped 0.5%.
• Brazil's Ibovespa index surged 1.6% to a record high.

Currencies

• The Bloomberg Dollar Spot Index fell 0.1%.
• The euro increased 0.1 % to $1.1285.
• The British pound gained less than 0.05% to $1.258.
• The Japanese yen weakened less than 0.05% to 107.82 per dollar.
• The Brazilian real climbed 0.7% to 3.8016 per dollar.

Bonds

• Britain's 10-year yield dipped two basis points to 0.673%, the lowest in almost three years.
• Germany's 10-year yield decreased two basis points to -0.402%.

Commodities

• Gold dipped 0.2% to $1,416.19 an ounce.
• West Texas Intermediate crude dipped 0.9% to $56.80 a barrel.

--With assistance from Anchalee Worrachate.

To contact the reporter on this story: Laura Curtis in London at lcurtis7@bloomberg.net

To contact the editors responsible for this story: Samuel Potter at spotter33@bloomberg.net, Yakob Peterseil

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