GLOBAL MARKETS-Shares push higher ahead of U.S. jobs data

Fri Oct 5, 2012 7:59am EDT

* FTSEurofirst 300 up 0.7 pct, MSCI global index up 0.3 pct
    * Euro holds after ECB reassures on bond buying
    * U.S. stocks seen slightly higher, US payrolls data due
1230 GMT

    By Marc Jones
    LONDON, Oct 5 (Reuters) - Global shares and the euro were on
course for 1.5 percent weekly gains on Friday, as investors
awaited U.S. jobs data and took heart from the European Central
Bank's assurances that it is ready to buy the bonds of troubled
euro zone governments.
    Major equity, commodity and other risk markets have been
trading more cautiously over the last few weeks having enjoyed a
15-20 percent rally between June and September as central banks
prepared and then delivered stimulus and support measures.
    The main market mover of the day is likely to be the monthly
U.S. payrolls report due at 1230 GMT. Recent indicators have
suggested the world's largest economy is seeing some traction
following last month's injection Federal Reserve aid, but
investors are now looking for firmer evidence.
    The data is expected to show employers added 113,000 jobs to
their payrolls in September, according to a Reuters poll of
economists. However, it would be too few to prevent the nation's
unemployment rate ticking up to 8.2 percent.
    U.S. stock futures   were pointing to a
higher open on Wall Street ahead of the data and the dollar was
slightly firmer against key currencies.
    "Should today's report come in line with expectations and
the same pattern be confirmed in the coming months, we see
increasing chances that the Fed will act again to stimulate
activity," said Newedge Strategy analyst Annalisa Piazza.    
    Following rises in Asian equities, the pan-European
FTSEurofirst 300 index was up 0.7 percent by 1130 GMT,
putting it on course for 1.5 percent rise this week. The MSCI
index of global shares, set for a similar gain, was up 0.3
percent.
    As the dollar firmed, the euro, closely linked to the bloc's
debt crisis, dipped back to $1.30, but remained close to
the two-week high of $1.3032 hit on Thursday.
    "Nothing really dramatic has happened this week and as long
as the U.S. jobs data do not completely distort the picture
later the general mood will probably remain cautious optimism,"
said Berenberg economist Holger Schmieding.
    "The overall trend for markets remains up because of
expectations of more monetary easing by the Federal Reserve and
the ECB restoring confidence in the future of the euro."
    
    ECB ASSURANCES
    Markets were also reassured by comments on Thursday from ECB
President Mario Draghi that the bank was primed to buy Spain's
bonds if it requested aid, meaning that Europe now had a "fully
effective backstop mechanism in place" to protect the euro.
    Senior euro zone central bank sources told Reuters on Friday
that the ECB was preparing for two months of large scale
purchases once it deployed its programme, after which it would
assess the situation. 
    Gloomier news came from Germany where industrial orders fell
1.3 percent, far more than expected. The chill from the euro
zone was also felt in Malaysia where exports suffered their
biggest year-on-year drop in nearly three years.
    It was Draghi's pledge though that dominated bond market
sentiment ahead of next week's meeting of euro zone finance
ministers, the IMF's annual meeting in Tokyo and debt auctions
from Italy, Germany and the Netherlands.
    German government bonds were little changed at midday,
Portuguese 10-year yields fell to a three-week low following
Lisbon's partial return to bond markets this week, while Italian
and Spanish 10-year bond yields also edged lower.
 
    "The big focus is anything we hear on Spain but it's almost
a game of cat and mouse." said Schmieding.
    "If bond yields stay where they are at the moment then Spain
doesn't have to ask for help, but bond yields are only where
they are because the market expects Spain to ask for help so
eventually the game has to stop."
  
    
    RAND RAGE
    Tensions remained high in South Africa as unrest in the
country's dominant mining sector spread. The rand fell 1.2
percent, close to a three-year low.
    Worries were further compounded after Shell 
declared force majeure on fuel deliveries in South Africa's
economic hub of Gauteng province due to a two-week strike by
more than 20,000 truck drivers. 
    In Asia, the Japanese yen remained firm against the dollar
and the euro after the Bank of Japan, as expected, took
no new monetary easing measures.. The growing
appetite for riskier assets lifted the Australian dollar
 away from a one-month low to $1.0267.
    Russia's central bank also kept interest rates unchanged,
indicating that inflationary risks remain and playing down signs
of an economic slowdown. 
    After jumping 4 percent on Thursday on supply fears, profit
taking and worries about weak global economies ahead of the U.S.
data saw oil prices dip 71 cents to $111.85. 
    Gold, a safe-haven asset and a hedge against
inflation as central banks flood the economy with cheap money,
hit a new 11-month high of $1,795.69 an ounce. 
    Schmieding at Berenberg said he expected central bank
support to continue to underpin risk markets.
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