Tokyo’s Topix index fell after hitting another record high. The move followed gains in European stocks, led by France. U.S. stock futures were little changed in Asia as markets were closed for a public holiday on Thursday.
Global stock indexes are on track to post their longest weekly gain since March, driven by a string of weak U.S. economic data that revived hopes of a rate cut in September. Emerging market stocks also benefited, with the MSCI Emerging Markets Index rising to a two-year high on Thursday.
“The market is expecting U.S. hiring to slow a bit or stabilize,” said Marco Oviedo, senior investment strategist at XP Investimentos in Sao Paulo. “Any signs that the economy is cooling quickly could be very positive for emerging market currencies.”
The dollar index steadied on Friday after three straight days of losses as developing-market currencies strengthened across the board, led by the Brazilian real. The pound, which had been trending higher since last week, was little changed as investors digested the prospect of a Labour victory in Thursday’s general election.
BloombergExit polls suggest Keir Starmer’s Labour party is expected to win a landslide victory, while Rishi Sunak’s ruling Conservative party is on track to post its worst ever performance and is likely to see some of its most senior figures expelled from Parliament.
France’s CAC 40 index rose for a second day ahead of the final vote in the country’s general election scheduled for this weekend, extending its gains as opinion polls suggested Marine Le Pen’s Rally National party and its allies would fall well short of a majority.
In Asia, Australian and New Zealand yields were little changed early on Friday, while the yen was steady after rebounding slightly from its lowest level since 1986 on Wednesday.
Data to be released in the region on Friday include inflation rates for the Philippines, Thailand and Taiwan.
Weak economic data
The U.S. services sector contracted at its fastest pace in four years, while the labor market showed signs of further weakening ahead of Friday’s key jobs report, reports said on Wednesday.
“Yesterday the ISM services index hit a post-pandemic low of 48.8 and job claims are worsening, but ultimately the negative data is being viewed as positive for the market,” said Justin Onuekusi, chief investment officer at St. James’s Place. “Everyone seems to be focused on September now.”
U.S. crude oil prices, including West Texas Intermediate, rose slightly early Friday. Bitcoin fell, trading near $57,800.
