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Thursday December 12th, 2019 7:46PM

Markets await monthly US jobs data amid Fed chief relief

By The Associated Press
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LONDON (AP) — Stock markets around the world were solid Friday ahead of monthly U.S. jobs data and as investors continued to welcome the appointment of Jerome Powell as the next head of the Federal Reserve.

KEEPING SCORE: In Europe, Germany's DAX was up 0.3 percent to 13,479 while Britain's FTSE 100 was steady at 7,556. France's CAC 40 was also unchanged at 5,509. Wall Street was poised to open higher, with Dow futures and the broader S&P 500 futures up 0.2 percent.

US JOBS: How U.S. stocks actually open could hinge on monthly nonfarm payrolls data, which can set the market tone for a week or two after their release, certainly at a time when the Fed is considering the timing of its next rate hike. Economists expect jobs growth of 310,000 jobs last month, which would be the highest monthly gain in two years. However, the figure is likely to be distorted by the bounce back following hurricane-related damaged. The unemployment rate is projected to remain 4.2 percent, the lowest in 16 years.

ANALYST TAKE: "Given the short term disruption caused by Harvey, the Fed is likely to be relatively forgiving, meaning that even if we saw a somewhat disappointing payrolls reading, we are still likely to see the Fed raise rates in December," said Joshua Mahony, market analyst at IG.

CURRENCIES: The dollar will likely bear much of the early reaction to the payrolls data. Ahead of their release it was trading flat, with the euro down 0.1 percent at $1.1647 and the dollar was steady at 114.05 yen.

FED CHIEF: President Donald Trump chose Fed Governor Powell to lead the Federal Reserve after current Chair Janet Yellen's term ends in February. Powell, a policymaker at the U.S. central bank since 2012, is expected to follow Yellen's cautious approach to raising interest rates. His selection wasn't a surprise for Wall Street, which had him as the front-runner.

TAX PLAN: Markets are assessing the $1.5 trillion tax cut plan unveiled by U.S. House Republicans. Under the plan, corporate rates will be cut, personal rates for most Americans will be lowered and some prized deductions will be reduced or eliminated. Attention was also turning to the latest U.S. payroll and unemployment data due out later in the day and its implications for the Fed's interest rate policy.

CHINA DATA: The country's service sector showed lackluster expansion last month, according to the latest Caixin purchasing managers' index, which rose from a 21-month low but remained weaker than average. Caixin's composite index covering both services and manufacturing fell to its lowest since July 2016. The figures add to concerns about slowing growth in the world's No. 2 economy.

ASIA'S DAY: Hong Kong's benchmark Hang Seng index rose 0.3 percent to finish at 28,603.61 while the Shanghai Composite in mainland China lost 0.3 percent to 3,371.74. South Korea's Kospi gained 0.5 percent to 2,557.97 and Australia's S&P/ASX 200 advanced 0.5 percent to 5,959.90. Southeast Asian benchmarks were mostly lower but Taiwan's index rose. Japan markets were shut for a holiday, which thinned Asian trading volumes.

ENERGY: Oil futures extended gains. U.S. benchmark crude oil rose 15 cents to $54.69 while Brent crude, the standard for international oil prices, was up 19 cents to $60.81 a barrel in London.

  • Associated Categories: Associated Press (AP), AP Business, AP Business - Economy, AP Business - Financial Markets, AP Business - Industries, AP Business - Utilities
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