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Stock markets largely rise before US jobs data

AFP . London
01 Sep 2023 11:09:05 | Update: 01 Sep 2023 17:32:08
Stock markets largely rise before US jobs data
A woman walks past an electronic quotation board displaying stock prices of each company listed on the Tokyo Stock Exchange along a street in Tokyo on August 25, 2023 — AFP Photo

Stock markets mostly rose and the dollar dipped Friday before a US jobs report set to offer more clues on the outlook for interest rates.

The labour report comes at the end of a week that has seen traders cheered by figures indicating the world's top economy is showing signs of softening, easing pressure on the Federal Reserve to lift interest rates further to fight high inflation.

"The US jobs report is the main focus for today as data this week indicated that there has been a slowing in the labour market and its robustness may be showing signs of cracks," noted Neil Wilson, chief market analyst at Finalto.

"This has helped raise hopes that the Fed might be done with rate hikes."

Wall Street's three main indices ended a volatile August on a tepid note Thursday after data showed the Fed's preferred gauge of inflation -- the personal consumption expenditures index -- ticked a little higher in July.

While the reading was in line with expectations, traders were little moved as they focused on the non-farm jobs figures due Friday, with hopes they will show the labour market continued to soften last month.

Other data this week on job openings, factory activity and economic growth, among other things, have fuelled optimism that the US central bank would not need to tighten monetary policy any more.

Analysts said, however, that there was an acceptance that rates would likely stay elevated for some time as more than a year of increases is allowed to work through the system, with no cuts seen for some time.

Investors were also assessing China's latest moves to help the country's battered property sector as authorities face growing calls to introduce a big-bang economic growth stimulus.

Chinese markets were lifted after the central bank cut the amount of foreign cash lenders must keep in reserve, in a bid to support the yuan.

Dealers also cheered the latest measures to help the property sector, which allow cities to cut down-payments for home buyers and encourage lenders to lower rates on existing mortgages.

The moves follow a series of pledges in August to shore up the industry, which is being ravaged by a gargantuan debt crisis.

Among them are rate cuts, lower rules for mortgage applicants, tax rebates for people upgrading their homes and a cap on commissions.

But observers say traders were unlikely to drag markets out of their slumber unless the government unleashes the sort of $550 billion "bazooka" seen in 2008 during the global financial crisis.

Data Thursday showed a massive plunge in sales in August, while developers are on the brink, with the biggest, Country Garden, close to default.