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European stocks head for 7th weekly gain

Yen at two-month high up on rate trek bets

Gold stable near record peak

By Amanda Cooper

LONDON, Feb 7 (Reuters) -

U.S. stock futures steadied on Friday ahead of U.S. payrolls information, with investors very carefully optimistic that the world might prevent a full-on trade war, while the possibility of more rate hikes in Japan this year briefly sent out the yen towards two-month highs.

In a week that began with U.S. President Donald Trump starting a trade war and whipping up market volatility, investors have actually watched out for making any significant moves, considered that he followed through on his threat to enforce duties on China while approving Mexico and Canada a one-month reprieve.

The critical U.S. jobs report for January is due ahead of the Wall Street open. Economists anticipate to see 170,000 workers included to nonfarm payrolls last month, but given the potential distortions from spells of cold weather condition and the California wildfires, the variety of projections is broad.

"The focus for the monetary markets in recent weeks has actually been very much on Trump and his economic policies, in specific on trade, however today there is the capacity for the tasks data to influence Fed rate expectations," Derek Halpenny, ribewiki.dk a currency strategist at MUFG, said.

"A pretty big divergence from the consensus is still most likely required to shift expectations especially however extreme weather condition at this time of the year has in the past led to sharply weaker NFP readings and weather could impact today ´ s report," he said.

Futures on the Nasdaq and S&P 500 were trading mainly constant on the day, while shares of

Amazon

insinuated premarket trading on the back of

weak point

in the retailer's cloud unit.

In Europe, the STOXX 600 headed for a seventh straight week of gains, trading flat on the day after having actually highs previously today, following a wave of strong profits from the likes of Danish weight-loss drugmaker Novo Nordisk, German software application business SAP and French lender BNP Paribas.

European stocks have staged their best efficiency in a decade against Wall Street in the first 6 weeks of 2025, however the focus is now on whether those gains can be sustained.

On the Asian market, tech stocks staged a rally, powered by Chinese retail investors, who have caught the AI theme in the wake of home-grown start-up DeepSeek's advancement.

DELICATE CHINA

Beijing's relatively measured response to Trump's tariffs has left room for settlements, analysts say, which has helped repair financier sentiment.

China's blue-chip stock index closed up 1.3% after touching a one-month high.

"Whilst there is significant noise and uncertainty, we don't see intensifying trade stress as a game changer in the potential customers for the Chinese market," said James Cook, financial investment director for emerging markets at Federated Hermes.

Markets are pricing in 43 basis points of relieving this year from the Fed, with a rate cut in July fully priced in, as policymakers remain in no rush to begin the rate-cutting cycle again.

The dollar edged up 0.1% against a basket of currencies, having rallied 7% last year, as financiers priced in a much more aggressive policy position from the Fed this year, where rate cuts might be few and far in between.

Other main banks are cutting interest rates, while the Bank of Japan is tailoring up for at least another rate trek this year. Strong wage growth information has beefed up the possibilities of tighter financial policy, which has actually pushed the yen to two-month highs against the dollar.

The yen touched 150.96 per dollar over night, its strongest level considering that December 10, before alleviating to leave the dollar up 0.4% on the day at 152.155.

Sterling reversed earlier losses to increase 0.1% to $1.2449, having dropped 0.5% on Thursday as the BoE cut rate of interest and slashed its 2025 UK development projection.

In commodities, oil edged up, while gold steadied above $2,800 an ounce, close to record highs.

(Additional reporting by Ankur Banerjee in Singapore; extra reporting by Stephen Culp, Marc Jones and Alun John; modifying by Shri Navaratnam, Sam Holmes, Gareth Jones and Angus MacSwan)