* U.S. private sector jobs data beats forecasts
* European stocks head higher, Wall St seen up slightly
* Oil down before U.S. stockpile numbers
* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
By Nigel Stephenson
LONDON, March 8 The dollar rose on Wednesday
after U.S. private-sector jobs numbers massively beat forecasts
to raise already sky-high expectations that U.S. interest rates
will go up next week.
U.S. stock markets looked set for a cautious open, with
index futures flat to slightly higher.
Europe's main share index, which had barely moved before the
U.S. data, headed higher. The pan-European STOXX 600 index
was up 0.1 percent, having fallen in the four previous
The modest moves in the index masked a gain of 7.5 percent
to a record high for German sportswear firm Adidas
after its new boss increased sales and profit targets.
French state-owned utility EDF, by contrast, hit an
all-time low after the government sold 231.1 million
preferential shares as part of a capital hike.
Britain's blue-chip FTSE 100 index earlier regained
ground and sterling halved its losses against the dollar and
euro as finance minister Philip Hammond delivered his first
budget since the UK voted to leave the European Union.
Hammond unveiled higher forecasts for growth and inflation
in 2017 but a lower projection for next year.
Sterling traded 0.2 percent lower on the day at $1.2177
, up almost half a cent from the day's lows, even after
the U.S. data. It was marginally lower on the day at 86.67 pence
The dollar rose 0.3 percent against a basket of currencies
after a U.S. private sector employment showed 298,000
jobs were added last month, 110,000 more than forecast.
Some analysts are waiting for Friday's U.S. non-farm
payrolls data as a final piece of evidence supporting a 25 basis
point rise at a Federal Reserve policy meeting on March 14-15,
which futures prices indicate is an 87.5 percent probability.
"Unless the market were to price in a significantly more
upbeat picture for the US, which would imply the Fed might move
much more dynamically than is currently priced in, whether they
hike two time or three times this year isn't going to matter for
the dollar," said Sonja Marten, FX strategist at DZ Bank in
The euro weakened 0.2 percent to $1.0536 a day before
a meeting of European Central bank policymakers.
"We're expecting them to change their assessment around the
risks – at the moment they have them to the downside, but we
have an out-of-consensus call that they're likely to say either
that downside risks have diminished or become more balanced,"
said BNP Paribas currency strategist Sam Lynton-Brown.
ECB asset-buying to stimulate the euro zone economy is among
factors that have pushed yields on short-dated German government
bonds to record lows in recent weeks.
Two-year yields edged down 1 basis point to minus 0.88
percent while 10-year yields rose 4 bps to 0.36 percent, taking
the gap between them to 122 bps, its widest since July 2014.
A German auction of five-year bonds on Wednesday met
lacklustre demand, attracting bids worth less than the 4 billion
euros of bonds on offer.
"We know the ECB is keen on buying much shorter-dated debt
so that may have tipped the balance against five-year paper,"
said Commerzbank rates strategist David Schnautz.
Earlier, trade data from Beijing briefly pushed the MSCI's
broadest index of Asia-Pacific shares outside Japan
higher, although it later traded flat. Mainland
Chinese shares dipped but Hong Kong stocks rose
China's imports in February grew 44.7 percent from a year
earlier on a yuan-denominated basis and 38.1 percent in dollar
terms, accelerating from the previous month and leading to a
rare trade deficit. Exports rose 4.2 percent.
The yen was half a percent weaker at 114.56 per dollar
Oil prices fell in anticipation of data expected to show
growing U.S. crude stockpiles. Brent, the international
benchmark, fell 52 cents a barrel to $55.40.
"Oil is range-bound. If prices dip below $50 a barrel, OPEC
will cut more; if it goes above $55 the U.S. will produce more,"
said Jonathan Barratt, chief investment officer at Ayers
Alliance in Sydney.
Gold fell 0.5 percent to $1,210 an ounce, weighed
down by the prospect of higher U.S. interest rates.
For Reuters Live Markets blog on European and UK stock
markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
(Editing by Toby Chopra and John Stonestreet)