A look at the day ahead in U.S. and global markets from Mike

Dolan

This week's stream of major macro moments around the world has

seen signs of a slight softening of U.S. labor markets go under

the radar a bit - but it will top the agenda on Friday.

To the extent that a cooling jobs market warns the Federal

Reserve not to delay too long in cutting interest rates, then

rising layoffs, jobless claims and falling job openings may be

partly responsible for the fresh effervescence in stocks.

February payrolls are expected to have increased by 200,000

jobs after adding 353,000 positions in January and the jobless

rate likely stayed at just 3.7%.

Surf's well and truly up again on Wall St after a wobbly

start to the week and futures were higher again ahead of the

report

Both the S&P500 and Nasdaq surged more than

1% each to new records on Thursday as Fed chair Jerome Powell

reprised his congressional testimony in the Senate and nodded

clearly to rate cuts ahead as the central bank becomes more

confident it has inflation back in its box.

"When we do get that confidence -- and we're not far from it

-- it'll be appropriate to begin to dial back the level of

restriction so that we don't drive the economy into recession."

The message was enough to remove all remaining doubts in

futures markets that the Fed will now cut as soon as June and

deliver up to 95 basis points of easing this year. Treasuries

were buoyed, even ahead of another heavy week of debt sales, and

10-year yields hit one-month lows.

And after its latest policy update on Thursday, the European

Central Bank is also now nailed on to cut rates in June - as

hawks concede easing is now necessary and even as some of its

more dovish members push for the move as soon as next month.

Banque de France head Francois Villeroy de Galhau said a

rate cut should happen in the spring, which he added was "from

April until June 21".

"The probability is increasing that we could possibly see a

rate cut before the summer break," the normally hardline

Bundesbank boss Joachim Nagel said on Friday.

The prospect of the ECB jumping the gun on the Fed reined in

the euro somewhat on Friday, but the dollar has generally

been a casualty of the stepped-up easing expectations and its

index hit the lowest since mid January.

That's mainly because the Bank of Japan is heading in the

opposite direction - likely tightening its super-loose monetary

policy as soon as this month and sending the yen to its

best levels in five weeks.

Amid a series of press rumblings and official statements

this week, Reuters sources on Friday said growing number of BOJ

policymakers had warmed to the idea of ending negative interest

rates in March as the annual wage round looks set to be robust.

But they added that some still urge a delay until April to

wait for next month's "tankan" business sentiment survey and the

bank's regional branch managers' report on the wage outlook.

After Thursday's setback, however, Japan's Nikkei stock

benchmark brushed off the speculation and rose 0.2%.

Stocks gained in China too, encouraged by this

week's upbeat trade numbers and as the country's securities

regulator vowed to protect small investors by cracking down on

market misbehaviour and improving the quality of listed

companies.

And on Friday Bloomberg reported that China is in the

process of raising more than $27 billion for its largest chip

fund to date to accelerate the development of cutting-edge

technologies to counter a U.S. campaign to thwart its rise.

Elsewhere in politics, President Joe Biden late Thursday

laid out his case for re-election in a fiery State of the Union

speech that accused Donald Trump of threatening democracy,

kowtowing to Russia and torpedoing a bill to tackle U.S.

immigration woes.

In company news, the soundings were more mixed overnight.

Broadcom ( AVGO ) said it expects $10 billion in revenue

from chips related to artificial intelligence this year, but its

stock dipped after the tech company's full-year forecast failed

to impress investors. Smaller rival Marvell Technology ( MRVL )

forecast revenue below market expectations, sending its stock

down over 6% in extended trading.

There was better news for the ailing New York Community Bank

, whose shares perked up after it said it's seeing

interest from non-bank bidders for some of its loans and will

outline a new business plan next month.

And in Europe, Novo Nordisk on Thursday surpassed

Tesla in market valuation after the maker of the

popular weight-loss drug Wegovy announced positive early trial

data for a highly anticipated new obesity drug.

Key diary items that may provide direction to U.S. markets later

on Friday:

* US Feb employment report, Canada Feb employment report

* New York Federal Reserve President John Williams

(By Mike Dolan, editing by Christina Fincher;

[email protected])