* U.S. payrolls likely to show strong hiring, wage growth
* Investors brace for rate hikes in U.S., and eventually
* YTD equity fund inflows of $82 bln now outpace bonds:
* Euro zone bank shares at highest since last Jan on ECB
* G20 meeting, Dutch elections, China data on tap next week
By Vikram Subhedar
LONDON, March 10 Stocks rose, the dollar was on
track for its fifth week of gains and crude oil rebounded
slighlty on Friday ahead of closely watched U.S. payrolls data
which is expected to give the Federal Reserve the green light to
raise interest rates next week.
Non-farm payrolls probably increased by 190,000 jobs last
month while employers boosted wages for workers, according to a
Reuters survey of economists.
Stocks on Wall Street were poised for a higher open with S&P
500 futures up 0.4 percent and trading near record
A tighter labour market, stock market boom and rising
inflation amid a strengthening global economy have left some
economists expecting that the Fed could increase interest rates
much faster than is currently anticipated by financial markets.
Investors face a busy economic and political calendar next
week which sees, along with a Fed rate decision, a meeting of
G20 finance ministers, a slew of Chinese economic data and the
The dollar has taken centerstage ahead of the G20 meeting in
light of Donald Trump's protectionist stance on international
"Global and local inflationary pressures could soon make
markets reprice Fed rate hike expectations going into 2018 and
beyond, which we think would be bullish for the USD," said
Morgan Stanley forex strategists in a note to clients.
The dollar index, which measures the greenback's
strength against a basket of major currencies, was little
changed, as the euro extended its overnight gains, but
held close to its highest levels since January.
The euro, and the regional banking index, enjoyed a lift
after European Central Bank head Mario Draghi's suggestion on
Thursday it was less necessary to prop up the market through
ultra-loose monetary policy.
The euro zone's main gauge of borrowing costs was set for
its biggest fortnightly rise in nearly two years on Friday as
investors prepared for rate hikes in the United States and
Investors now expect the ECB to raise interest rates by
March 2018, according to money market pricing, while some banks
are calling for multiple hikes next year.
BONDS TO EQUITIES
Optimism about an economic recovery in Europe gaining
traction helped the regional benchmark equity index
claw back some of its weekly losses. The index rose 0.4 percent
helped by financials and energy shares.
Shares of Euro zone banks rose nearly two percent to
their highest in more than a year while BT Group jumped
more than 4 percent after the telecoms giant after ending a
two-year row with the UK regulator.
Investors globally pumped money into stocks for the tenth
straight week, according to the latest data from Bank of
America-Merrill Lynch and fund tracker EPFR.
The MSCI All-Country World index is less
than a percent below all-time highs.
Year-to-date equity fund inflows of $82 billion now outpace
the $80 billion into bond funds, the data showed, further
stoking talk of the "Great Rotation" out of fixed income into
"For years bonds have lived on soft growth, low inflation
and unprecedented policy support," Societe Generale strategist
Ciaran O'Hagan said.
"With the global economy now in firm recovery, central banks
are gradually unplugging life support - a reality bond investors
still cannot bear watching."
In commodity markets, crude prices inched up after dropping
to their lowest in more than three months in the previous
session on worries about a global supply glut.
U.S. West Texas Intermediate crude was up 0.5 percent
while Brent crude rose 0.4 percent.
Gold fell below the key level of $1,200 an ounce on Friday
and was on track for its worst week in four months, pressured by
a stronger dollar.
(Additional reporting by John Geddie and Kit Rees; Editing by