European stocks head for 7th weekly gain

Yen at two-month high up on rate hike 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 investors carefully positive that the world may prevent a full-on trade war, while the prospect of more rate hikes in Japan this year briefly sent the yen towards two-month highs.

In a week that began with U.S. President Donald Trump beginning a trade war and whipping up market volatility, financiers have actually been careful of making any significant moves, considered that he followed through on his danger to enforce tasks on China while giving Mexico and Canada a one-month reprieve.

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

"The focus for the financial markets in recent weeks has been quite on Trump and his financial policies, in specific on trade, but today there is the potential for the jobs data to influence Fed rate expectations," Derek Halpenny, a currency strategist at MUFG, said.

"A quite big divergence from the consensus is still likely needed to move expectations especially but extreme weather at this time of the year has in the past resulted in dramatically weaker NFP readings and weather might impact today ´ s report," he said.

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

Amazon

insinuated premarket trading on the back of

weak point

in the retailer's cloud unit.

In Europe, the STOXX 600 headed for a seventh straight week of gains, trading flat on the day after having hit record highs earlier this week, following a spate of strong revenues from the likes of Danish weight-loss drugmaker Novo Nordisk, setiathome.berkeley.edu German software company SAP and French lender BNP Paribas.

European stocks have actually staged their finest 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, bytes-the-dust.com powered by Chinese retail financiers, who have actually struck on the AI theme in the wake of home-grown start-up DeepSeek's breakthrough.

DELICATE CHINA

Beijing's relatively determined action to Trump's tariffs has actually left room for negotiations, experts state, which has actually assisted repair financier belief.

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

"Whilst there is significant sound and uncertainty, we do not see escalating trade tensions as a game changer in the potential customers for the Chinese market," said James Cook, financial investment director for emerging markets at Federated Hermes.

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

The dollar edged up 0.1% against a basket of currencies, wiki.rrtn.org having actually rallied 7% in 2015, as investors priced in a much more aggressive policy stance from the Fed this year, where rate cuts may be few and far in between.

Other main banks are cutting interest rates, bytes-the-dust.com while the Bank of Japan is tailoring up for a minimum of another rate hike this year. Strong wage development data has actually intensified the opportunities of tighter monetary policy, which has actually pressed the yen to two-month highs against the dollar.

The yen touched 150.96 per dollar over night, its strongest level given that December 10, oke.zone before reducing to leave the dollar up 0.4% on the day at 152.155.

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

In products, 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)