* Markets nervous ahead of jobs data seen key to U.S.
* European shares bounce after four days of falls
* Bond yields up on risk Fed tapers stimulus this month
By Marc Jones
LONDON, Dec 6 Financial markets were in a state
of suspended animation on Friday as tension mounted ahead of
jobs data that could make or break the case for an imminent
scaling back in U.S. stimulus.
The to-and-fro of when the Federal Reserve will begin to
halt the flow of cheap dollars has dominated trading worldwide
for months and the main U.S. jobs indicator - non-farm payrolls,
due at 1330 GMT - may yet tip the balance again.
A bunch of top U.S. data has already come in strongly this
week triggering a hefty sell-off in global stock and bond
markets that had in most cases been at multi-year highs.
European bourses made a cautious recovery in early trade
, but the week's turbulence, amplified by the diverging
fortunes of the region's top economies, left the FTSEurofirst
300 index heading for its worst week in six months.
Government borrowing costs from Japan to Germany also
hovered around fresh highs on trepidation the Fed could start
tapering its $85 billion of monthly debt purchases at its policy
meeting on Dec. 17 and 18.
The median forecast is for an increase of 180,000 in U.S.
payrolls with the jobless rate steady at 7.2 percent.
The market would tend to see anything over 200,000 as
greatly adding to the chances of a start to tapering this month,
while a result under 150,000 would diminish the risk.
"A very strong payroll would give greater confidence that
the U.S. has weathered the recent government shut down well,"
said Luke Bartholomew, investment analyst at Aberdeen Asset
It would "increase speculation that tapering could still be
on the cards for December. So, perversely, a strong number could
be damaging for stocks and other risk assets."
For the moment, however, European shares were on track to
snap a four-day run of falls as London's FTSE, Paris's
CAC 40 and Frankfurt's Dax all gained 0.4 to
The Bundesbank gave German stocks a boost by raising its
growth forecasts for the euro zone's largest economy for this
year and next.
Japan's Nikkei had also managed to steady after
steep falls in the previous two days. It closed up 0.8 percent,
outperforming the rest of Asia.
Shanghai stocks also stood out, slipping 0.5 percent
after China set its yuan at a record high, continuing
its slow appreciation.
The dollar had started to pull away from a five-week
low as European trading gathered pace, while the euro
took a breather ahead of the U.S. jobs data after hitting a
five-week high on Thursday.
Traders had snapped up the euro zone's shared currency after
the bloc's central bank, the ECB, appeared in no rush at its
last meeting of the year to take any further action to support
the bloc's still-fragmented economy.
Draghi's playing down of the need for another long-term
liquidity operation (LTRO) disappointed dealers who had been
hoping for just such an operation to ease a liquidity squeeze
over year end.
The single currency steadied at $1.3655 having
finally cracked tough resistance at $1.3620. The next chart
target was $1.3705/18, which would not be too distant from the
2013 top of $1.3832.
The upward move has been in tandem with a widespread rise in
government bond yields. German 10-year yields were
on track for their biggest one-week rise since mid-August as
they hovered at 1.84 percent ahead of the U.S. data.
In commodity markets, spot gold held at $1,224 an
ounce, heading for a loss for the week of 2 percent.
U.S. crude was flat at $97.38, cementing gains of 5
percent for the week so far thanks to a drop in U.S. crude
stocks. Brent crude added 40 cents as it hovered just
below $111 a barrel.