Global Shares, Bunds edge higher, plenty of risk ahead

Mon Feb 10, 2014 5:16am EST
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By Marc Jones

LONDON (Reuters) - World shares made guarded gains on Monday, encouraged that Wall Street was able to weather a seemingly disappointing U.S. jobs report last week but with more than enough event risk ahead to keep investors cautious.

European stocks got off to steady start, holding their ground along with safe-haven German Bunds as moves remained limited ahead of the week's bigger events.

The new head of the Federal Reserve, Janet Yellen, delivers her first testimony to the House of Representatives on Tuesday and the Senate on Thursday. Markets will be hoping for reassurance that policy will stay loose for a long time to come.

The dollar had begun to retreat as European trading gathered pace, softened by questions over Yellen's stance and what if any impact a second successive month of uncertain jobs data could have on the Fed's stimulus withdrawal.

It was last trading at $1.3644 to the euro and was buying 102.20 yen, a turnaround from Asian trading when it had bobbed as high as 102.41.

"I think the market is bit on the dovish side of where it should be," Saxo Capital Markets chairman Nick Beecroft said.

"Given the perception of Janet Yellen being a dove, if she doesn't come over extra-dovish it could be a bit of a disappointment."

Both stocks and the dollar initially retreated when Friday's U.S. payrolls report showed a rise of only 113,000 in January, falling well short of forecasts. The damage was limited by a very strong household survey in which a sharp jump in the number of people employed nudged the jobless rate down to 6.6 percent.   Continued...

Traders are pictured at their desks in front of the DAX board at the Frankfurt stock exchange February 5, 2014. REUTERS/Remote/Stringer