LONDON—Global stock markets traded in narrow ranges Thursday, a day after big gains that were prompted by a sharp rebound in the price of oil. Investors are preparing for Friday’s U.S. monthly payrolls report, which could go a long way to determining whether the Federal Reserve raises interest rates again next month.
In Europe, the CAC-40 in France was down 0.2 percent at 4,219 while Germany’s DAX fell 0.1 percent to 9,430. The FTSE 100 index of leading British shares outperformed its counterparts, trading 0.8 percent higher at 5,882. Wall Street was poised for a soft opening, with Dow futures and the broader S&P 500 futures down 0.1 percent.
Investors are positioning themselves for Friday’s payroll numbers. Over the past couple of weeks, they have scaled back expectations that the Fed will continue gradually raising interest rates amid signs that the global slowdown in growth is beginning to hurt the U.S. economy. On Wednesday, for example, the private ISM survey found U.S. services companies grew in January at the slowest rate in nearly two years.
“The Fed has ended up being boxed in and is finding itself at the mercy of external economic developments, such as the slowing Chinese economy,” said Neil MacKinnon, global macro strategist at VTB Capital.
Diminished expectations of a March Fed rate hike have hit the dollar. The euro was up 0.8 percent at a three-month high of $1.12 while the dollar fell 0.4 percent to 117.30 yen.
The dollar’s retreat on Wednesday in particular helped oil prices spike as the weaker currency makes oil cheaper for international investors buying with other currencies. On Thursday, benchmark U.S. crude fell 12 cents to $32.16 a barrel in electronic trading on the New York Mercantile Exchange. The contract jumped $2.40, or 8 percent, to close at $32.28 a barrel on Wednesday in New York. Brent crude, a benchmark for international oil prices, dipped 47 cents to $34.57.
Most Asian markets rallied Thursday. South Korea’s Kospi added 1.4 percent to 1,916.26 and Hong Kong’s Hang Seng advancing 1 percent to 19,183.09. The Shanghai Composite Index in mainland China climbed 1.5 percent to 2,791.02. Japan’s Nikkei 225 lost 0.9 percent to close at 17,044.99 after the yen strengthened sharply against the dollar, hurting share prices of the country’s export manufacturers.