Here are the latest developments in global markets:
FOREX: The dollar continued to rise slowly against its major peers after US Treasury yields peaked at fresh highs early today but remained closed to 3-year lows. The dollar index inched up to an intra-day high of 88.88 (+0.16%) and dollar/yen was on track to break above 110, posting a fresh one-week high at 109.91 (+0.46%). Today’s news that the BOJ was planning to buy an unlimited amount of Japanese government bonds also worked in favor of the greenback. Euro/dollar slipped to 1.2475 (-0.18%) and pound/dollar declined to 1.4229 (-0.34%) on the back of a stronger dollar, while weaker-than-expected readings on the British construction PMI and the Eurozone PPI also weighed on the two currencies. The antipodean currencies were the bigger losers as spreads between the local and US yields were falling. Aussie/dollar stretched downwards to 0.7975 (-0.63%) and kiwi/dollar retreated to 0.7141 (-0.61%).
STOCKS: A sharp loss in Deutsche Bank’s shares dragged the pan-European STOXX 600 lower on Friday, with the index falling by 0.91% at 1100 GMT and being set to post its bigger weekly loss since August after a strong start to the year. The blue-chip Euro STOXX 50 dived by 1.01% and the German DAX 30 tumbled by 1.13%. The UK FTSE 100 was down by 0.28%, weighed by losses in telecommunication services. US stock futures were mixed.
COMMODITIES: WTI crude oil was trading 0.10% up on the day at $65.88/barrel supported by OPEC-led supply cuts despite rising US production. Brent was down by an equivalent percentage at $69.58/barrel. Gold was last seen at $1345.40/ounce, down by 0.25% on the day.
Day ahead: NFP report said to show better results in January
US Nonfarm payrolls will take center stage during the day with the potential to shake the dollar which has been gaining against a basket of major currencies so far in the day.
Following Wednesday’s upbeat APD employment report which tracks changes in the private sector, the government’s comprehensive nonfarm payrolls due at 1330 GMT are expected to come higher at 180,00 new positions in January compared to 148,000 seen in December. Regarding the unemployment rate, this is anticipated to remain steady at a 17-year low of 4.1%. However, wage growth figures are expected to be of greater importance for the dollar as the Fed has been long concerned about subdued wages which probably are the reason why inflation is weak. Analysts believe that average hourly earnings have risen by 2.6% y/y in the twelve months to January compared 2.5% in the previous month, while on a monthly basis they project that the measure has continued to increase at the December’s pace of 0.3%. Any upside surprise in the wage growth, though, would add optimism that the Fed’s monetary policy is going in the right direction and hence justify any plans for further policy tightening this year. Note that private sector wages rose by 2.8% y/y in the fourth quarter, above the previous print of 2.6%, posting the highest increase since the first quarter of 2015.
In other data out of the US, December’s factory orders and the University of Michigan’s final readings on consumer sentiment for the month of January will also gather attention at 1500 GMT. Both measures are anticipated to show some improvement.
In energy markets, the US Baker Hughes oil rig count is due at 1800 GMT.
Public appearances today will involve comments by the Dallas Fed President Robert Kaplan – a non-voting FOMC member in 2018 – who will be participating in a Q&A session before the Teacher Retirement System of Texas Annual Conference at 1830 GMT. A few hours later, the San Francisco Fed President John Williams – a voting FOMC member in 2018 – will be talking about the US economy before the Financial Women of San Francisco at 2030 GMT.
Energy companies Chevron and Exxon Mobil and pharma firm Merck & Co. are among firms releasing quarterly results on Friday. All three will be releasing their reports before the US market open.
 and dollar/yen was on track to break above 110, posting a fresh one-week high at 109.91 (+0.46%). Today's news that the BOJ was planning to buy an unlimited amount of Japanese government bonds also worked in favor of the greenback. ){kind=link}