Market update: Investors cautiously optimistic ahead of US employment report

US equities continued their winning streak yesterday, with the Dow Jones ending at a record high for the third day in a row, at 14,329.49 (+0.2%; S&P 500 +0.2%). US jobs data continued to spur markets higher, as initial jobless claims – filings for unemployment benefit – fell unexpectedly last week to a seasonally-adjusted figure of 340,000. Hopes are now high that today’s important US non-farm payrolls report will show around 160,000 jobs being added in February. The data will help investors anticipate the next moves from the US Federal Reserve. There were no policy changes from either the European Central Bank (ECB) or Bank of England yesterday, but the possibility of further easing in the future cannot be ruled out. ECB president Mario Draghi said his governing council continued to see downside risks surrounding the economic outlook for the euro area.

Overnight, China has reported a surge in exports, up 21.8% in February from a year earlier, offering reassurances that Chinese economic expansion has not stalled, and that global demand was recovering. Chinese imports, while weaker than expected, did not seem to overly concern analysts. At the time of writing, the markets remain cautiously optimistic: both the FTSE Eurofirst 300 and the FTSE 100 are up 0.5%. Financials have been gaining ground as risk appetite prevails.