Europe, U.S. shares heading for first weekly drops in three Bonds rally this week on bets the Fed will keep rates on hold Share on Facebook Share on Twitter European shares and U.S. index futures trimmed an advance as oil pared gains ahead of U.S. data expected to show jobs growth in January was the weakest since September. The dollar headed for its worst week since 2009, while gold rose. The Stoxx Europe 600 Index and Standard & Poor’s 500 Index futures were little changed, as oil traded at $31.78 a barrel. The Bloomberg Dollar Spot Index was also little changed after slumping this week as traders boosted bets the Federal Reserve will keep interest rates on hold this year. Fixed-income securities across the world have rallied in the past five days as policy makers painted a gloomy picture of the world economy. Gold climbed, extending a third weekly gain. Concern the U.S. is vulnerable to global headwinds has dominated markets this week, fueling a retreat in the dollar and stocks and pushing futures traders to price in no Fed rate hikes this year. Economists forecast a 190,000 gain in nonfarm payrolls from 292,000, with the unemployment rate holding at 5 percent. While a weaker dollar makes commodities more appealing in other currencies, oil is heading for its first weekly loss since mid-January as U.S. inventories rise to a record. “Oil prices are still calling the shots when it comes to market direction,� said Steven Santos, a broker at Banco de Investimento Global SA in Lisbon. “Let’s see what today’s jobs report holds in store -- we know the Fed is data dependent, but it’s definitely taking global risks into account. A strong number could lift investor sentiment.� Stocks The Stoxx 600 rose less than 0.1 percent at 11:21 a.m. in London, fluctuating between gains and losses. Futures on the Standard & Poor’s 500 Index also climbed less than 0.1 percent. Both equity gauges are heading for their first declines in three weeks, while miners worldwide have rallied the most among industry groups. BNP Paribas SA rose 4.4 percent after announcing a revamp of its investment bank to boost profit and free up capital. Volvo AB gained 2.4 percent after the world’s second-biggest truckmaker reported higher earnings than a year earlier. LinkedIn Corp. tumbled 31 percent in premarket New York trading after the professional networking site forecast a year of slower revenue growth. ArcelorMittal lost 7.9 percent after announcing plans to raise $3 billion from investors and sell a $1 billion stake in Spanish auto-parts maker Gestamp in a bid to ride out an industry slump caused by record Chinese exports. Hong Kong’s Hang Seng Index rose 0.5 percent, while the Hang Seng China Enterprises Index gained 1 percent. The Shanghai Composite Index dropped 0.6 percent. Mainland Chinese markets are closed with Taiwan’s next week for the Lunar New Year break, while Hong Kong is shut for the first three days, resuming Thursday. The Topix index in Japan fell 1.4 percent with the local currency poised for its best weekly performance since July 2009. The Nikkei 225 Stock Average has fallen for four of the past five weeks as losses among exporters wiped out gains incurred after the Bank of Japan unexpectedly bolstered monetary stimulus on Jan. 29. Demand for government debt sent Japan’s 10-year bond yields to a record low. “The Bank of Japan has done what they should, but what they could do had its limits,� said Juichi Wako, a senior strategist at Nomura Holdings Inc. in Tokyo. “Until now the view on the U.S. economy was that it’s recovering, but the pace isn’t as fast as hoped. Now there’s some concern in the market that it may actually be contracting.� (An earlier version of this story was corrected to amend the size of Japan’s money-market industry and direction of copper’s move in last paragraph.)

Source