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Investment Daily: S&P 500 ended higher ahead of key US jobs data

7 February 2025

Key takeaways

  • US stocks and Treasury yields edged higher ahead of key jobs data.
  • European stocks rose and bonds fell marginally.
  • Asian stocks traded mostly higher.

Markets

US stocks ended mixed but mostly higher as investors digested a slew of corporate earnings reports and looked ahead to today’s employment data. The S&P 500 gained 0.4%.

US Treasuries ended with small losses ahead of key jobs data. 10-year yields edged 1bp higher to 4.43%.

European stock markets rose on Thursday helped by a raft of upbeat earnings. The Euro Stoxx 50 closed 1.6% higher. The German DAX and the French CAC both gained 1.5%. In the UK, the FTSE-100 closed 1.2% higher.

European government bonds fell marginally as the Bank of England cut its policy rate as expected. 10-year German bund yields rose 2bp to 2.38% as 10-year French bond yields were up 1bp to 3.09%. In the UK, 10-year gilt yields rose 4bp to 4.48%.

Asian stock markets traded mostly higher on Thursday as the overnight decline in Treasury yields bolstered market sentiment. Japan’s Nikkei 225 gained 0.6% following positive corporate earnings, while Korea’s Kospi rallied 1.1%, tracking gains in US chipmakers. Chinese equities also advanced, with tech shares climbing on optimism surrounding AI developments. Hong Kong’s Hang Seng and China’s Shanghai Composite ended up 1.4% and 1.3%, respectively. Meanwhile, India’s Sensex bucked the regional trend, falling 0.3% ahead of today’s central bank policy decision.

Crude oil prices fell on Thursday, as investors continued to weigh geopolitical/US policy news that could potentially affect the global oil supply and demand outlook. WTI crude for March delivery settled 0.6% lower at USD70.6 a barrel.

Key Data Releases and Events

Releases yesterday

In Mexico, the central bank cut its policy rate to 9.50% from 10.00% amid uncertainty regarding US economic policy.

In the UK, Bank of England cut interest rates by 25bp to 4.50% as expected, given softer labour market conditions, stagnating growth and a gradual reduction in service sector inflation.

Releases due today (7 February 2025)

US nonfarm payrolls growth is expected to slow to 175k in January, from 256k in December, following some unexpectedly strong readings. The labour market is broadly in balance.

Following its recent rollout of a comprehensive set of measures to boost banking system liquidity, the Reserve Bank of India (RBI) is expected to cut policy rates by 25bp to support growth amid moderating inflation.

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