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Gold dips, FTSE 100 volatile after US jobs data

by Chris Marshall on Mar 07, 2014 at 15:32

With no major companies scheduled to report financial updates, Britain’s FTSE 100 fell 0.3% to 6,766, heading towards a loss of some 40 points for the week.

Investors continue to gauge the situation in Ukraine, where US president Barack Obama has urged Russia's Vladimir Putin to seek a diplomatic solution, while news that China has suffered its first corporate bond default also dented the mood. A small Shanghai-based solar power company has defaulted on its interest payments, with concerns about wider ramifications, according to reports.

All eyes though are on US jobs data this afternoon. The unemployment rate is expected to remain steady at 6.6%, while the ‘non-farm payrolls’ report is expected to show that 150,000 jobs were added to the economy in February, after two successive months of disappointing outcomes.

‘A third consecutive month of weak payroll growth in February would raise speculation that the Fed will pause the tapering of its asset purchases,’ speculated Paul Dales of Capital Economics.

Jonathan Sudaria, a dealer at Capital Spreads, said traders were looking towards the figures optimistically: ‘If it’s a bad number, so what, the markets will probably shrug it off and blame it on the weather again as has been evidence by the amount of pundits already making apologies for it. If it’s a good number, well the ability to create jobs despite the weather must be a sign of underlying strength.’

In London, Aviva (AV.L) topped the FTSE 100, adding to Thursday’s gains after the insurer reported a 6% rise in operating profits for 2013 to £2 billion. Shares were up nearly 2% on Friday to 513p.

In currency markets the euro added to steep gains on Thursday after the European Central Bank confounded growing expectations for further policy action. The single currency was trading up 0.1% at $1.3875

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