Volkswacht Bodensee - Stock markets diverge, dollar drops before US jobs data

Ahead of the release, traders were keeping tabs on China, where US Treasury Secretary Janet Yellen is on a four-day visit for talks with top policy officials aimed at smoothing strained ties between the economic superpowers.

Yellen on Friday told Chinese Premier Li Qiang that the United States was not seeking "winner-take-all" competition.

Li said that Beijing could see the relationship recovering after a difficult period.

Global equities have meanwhile suffered some sharp losses this week, the start of the second half of 2023.

"There is mounting anxiety about the resilience of the economy and what that will mean for interest rates going into the end of this year and 2024," noted Craig Erlam, senior market analyst at OANDA trading group.

Data this week showed economic recovery in China, the world's second-biggest economy, had run out of steam, just months after the lifting of painful zero-Covid measures.

In the United States the picture is different, with the economy running better than expected. Nevertheless, this has increased the likelihood of more rises to interest rates, which could turn the tide and start to weigh heavily on growth, according to economists.

Data Thursday showed US private firms created twice as many jobs as expected in June, while the crucial services sector saw solid growth.

The readings pointed to an economy that remained in rude health, even after 10 straight interest rate hikes, and analysts said it solidified bets on a July rate increase at least.

Investors were awaiting Friday's release of US non-farm payrolls figures that should provide further clues about the Federal Reserve's rate-hike plans.

"Global stock markets have entered the end of the week with renewed nervousness," said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.

- Key figures around 1100 GMT -

London - FTSE 100: DOWN 0.3 percent at 7,260.65 points

Frankfurt - DAX: UP 0.4 percent at 15,592.29

Paris - CAC 40: UP 0.5 percent at 7,118.12

EURO STOXX 50: UP 0.3 percent at 4,237.48

Tokyo - Nikkei 225: DOWN 1.2 percent at 32,288.42 (close)

Hong Kong - Hang Seng Index: DOWN 0.9 percent at 18,365.70 (close)

Shanghai - Composite: DOWN 0.3 percent at 3,196.61 (close)

New York - Dow: DOWN 1.1 percent at 33,922.26 (close)

Euro/dollar: UP at $1.0892 from $1.0891 on Thursday

Pound/dollar: UP at $1.2766 from $1.2738

Dollar/yen: DOWN at 143.20 yen from 144.10 yen

Euro/pound: DOWN at 85.35 pence from 85.48 pence

Brent North Sea crude: UP 0.5 percent at $76.88 per barrel

West Texas Intermediate: UP 0.3 percent at $72.04 per barrel

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T.Bondarenko--BTB