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European stocks head for 7th weekly gain

Yen at two-month high on rate trek bets

Gold steady near record peak

By Amanda Cooper

LONDON, Feb 7 (Reuters) -

U.S. stock futures steadied on Friday ahead of U.S. payrolls information, with financiers carefully optimistic that the world may avoid a full-on trade war, while the prospect of more rate hikes in Japan this year briefly sent the yen towards two-month highs.

In a week that started 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 giving 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 employees included to nonfarm payrolls last month, but provided the possible distortions from spells of winter and the wildfires, the variety of forecasts is large.

"The focus for the monetary markets in current weeks has been quite on Trump and his economic policies, in particular on trade, but today there is the potential for the jobs information to influence Fed rate expectations," Derek Halpenny, a currency strategist at MUFG, said.

"A pretty big divergence from the agreement is still likely required to shift expectations especially however severe weather at this time of the year has in the past resulted in dramatically weaker NFP readings and weather could impact today ´ s report," he said.

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

Amazon

slipped in premarket trading on the back of

weakness

in the retailer's cloud system.

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

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

On the Asian market, tech stocks staged a rally, powered by Chinese retail financiers, who have actually struck on the AI style in the wake of home-grown start-up DeepSeek's advancement.

DELICATE CHINA

Beijing's seemingly determined action to Trump's tariffs has left space for wiki.lafabriquedelalogistique.fr settlements, analysts say, which has assisted repair financier sentiment.

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

"Whilst there is substantial sound and uncertainty, we do not see escalating trade tensions 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 easing 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% in 2015, as investors priced in a much more aggressive policy stance 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 development data has actually boosted the chances 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 since December 10, before relieving 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 rates of interest and slashed its 2025 UK development projection.

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

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