LONDON (Reuters) – Caution ahead of U.S. jobs numbers kept a lid on gains for stock markets on Friday after an optimistic start to the year that has added more than 7 percent to global company values.
Sentiment was underpinned by data that hinted the euro zone may yet avoid recession, boosting European shares, and that China has room to ease monetary policy.
The U.S. nonfarm payrolls report will be a key catalyst as strong data would fuel growing hopes the global economy is on a firm recovery path, while disappointing numbers could add to pressure on the U.S. Federal Reserve to stimulate the economy, supporting appetite for riskier assets.
“A weak read will probably be interpreted as an indication that QE3 (a third round of quantitative easing) is needed to help the recovery,” Cameron Peacock, market analyst at IG Markets, said.
Payrolls are forecast to rise by 150,000 after a 200,000 increase in December, with the unemployment rate seen static at 8.5 percent.
Tensions ahead of the data kept the dollar teetering near three-month lows versus the yen on Friday, trading at 76.19 yen and keeping alive the threat of official intervention from Tokyo to weaken the Japanese currency.
“The pressure has really been on
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