London - Gains for European and Asia stocks capped a wild week for financial markets on Friday, ahead of a key U.S. jobs report that could determine the chances of the Federal Reserve raising interest rates before year-end.
Concerns about US monetary policy and slowdown in emerging markets led by China have hit commodities markets and related stocks like Glencore and sent credit spreads wider this week in the wake of a summertime surge in volatility.
An escalation of fighting in Syria, with Russian air strikes marking its biggest Middle East intervention in decades, has so far failed to spook global markets beyond a rise in oil prices, however, and global equities are set to end the week flat.
“European equities are trading higher this morning, trying to stage a hesitant rebound after yesterday's bearish market action,” said Markus Huber, a trader at Peregrine & Black.
“While a very strong [US data] reading would certainly increase the likelihood of a rate hike this year, very few expect that the Fed will pull the trigger as soon as October.”
The pan-European FTSEurofirst 300 up 0.8 percent, while German Bund futures were little changed.
The US dollar index was slightly higher ahead of nonfarm payrolls data expected to show the US economy added 203 000 jobs in September, according to a Reuters poll.
While years of cheap central bank cash in the wake of the 2007-2008 financial crisis have fuelled asset prices, recent signs of a slowdown in global economic growth and the Fed's decision last month to put off a rate rise have spooked investors betting on a return to more normal policy.
Mixed data on Thursday failed to give more clues, with the pace of growth at US factories slowing in September while new jobless claims pointed to a tightening labour market.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.3 percent, and was on track for a weekly gain of 1.2 percent after posting its poorest quarterly performance since 2011 with a decline of 17 percent.
Australian shares fell 1.1 percent while Japan's Nikkei Average fell 0.4 percent. Chinese markets are shut for a week-long holiday with India also closed on Friday.
Beijing said on Wednesday it would cut the minimum down-payment for first-time home buyers in many cities, the second policy measure in two days to fire up Chinese consumption.
“Even if this might not have much impact on property prices, it shows the central government has policy intentions to boost GDP growth,” said Castor Pang, head of research at Core Pacific-Yamaichi in Hong Kong.
On commodities markets, U.S. crude rose 55 cents to $45.29 per barrel while Brent rose to $47.95. Copper was set to snap a two-week decline as investors bet production cuts would support prices, though concerns about demand from top consumer China remained.
REUTERS