GLOBAL MARKETS-Stocks dip on euro zone concerns; dollar up

* World stocks end 6th day winning run before U.S. jobs data

* Euro zone peripherals’ borrowing costs up on Ireland

* Dollar recovers from an 11-month low

* European banks struggle

By Dominic Lau

LONDON, Nov 5 (BestGrowthStock) – World stocks on Friday pulled back
from a two-year high reached after the Fed’s stimulus package,
with investors cautious ahead of U.S. jobs data and on concerns
over Ireland’s budget, while the dollar recovered from an
11-month low.

Borrowing costs in euro zone’s weaker economies rose sharply
after some traders said Ireland’s budget to cut spending and
raise tax totalling 6 billion euros next year was “unrealistic”.

Irish stocks also fell sharply, with the country’s benchmark
(.ISEQ: ) down 1.8 percent and Bank of Ireland shares (BKIR.I: )
falling more than 11 percent.

“This is concerning, the spread of contagion to Spain and
Italy given their structural significance in the euro zone and
potential for broader financial shock,” said Lena Komileva, head
of G7 market economics at Tullet Prebon.

Banks (.SX7P: ) were the top stocks losers in Europe, down 1.1
percent, while Wall Street looked set for a softer opening.

Spanish and Italian bond spreads (ES10YT=RR: ) (IT10YT=RR: )
over equivalent 10-year German Bunds (DE10YT=RR: ) were around
five basis points wider, while the Irish/German 10-year yield
spread (IE10YT=RR: ) hit a new high at 553 bps.

The cost of protection against Irish credit default rose 28
bps to 610 bps to a record high.

The Thomson Reuters Peripheral Eurozone Countries Index
(.TRXFLDPIPU: ) fell 2.5 percent, while the Spanish share
benchmark (.IBEX: ) lost 2 percent.

Event risk remains high for the periphery with the Greek
Prime Minister threatening to call early general elections if
disgruntled voters do not back his austerity plans in local
elections this weekend and with Portugal planning to issue up to
1.5 billion euros of bonds next week. [D/DIARY]

The Federal Reserve’s decision on Wednesday to spend $600
billion buying longer-term Treasury bonds to reflate the
flagging economy has helped boost risk appetite, with investors
piling into emerging market assets and commodities in search of
higher returns. The dollar, on the other, has suffered.

Investor focus now turns to the U.S. monthly jobs data, due
at 1230 GMT, and traders said any upside surprise from the
numbers is likely to offer only a fleeting respite to the
greenback. A weaker number could see the dollar-selling trend
gather pace.
“The Fed has made it clear that quantitative easing will
remain in place and there is enough slackness in the U.S.
economy. So any strong number is unlikely to offer much support
to the dollar,” said Ian Stannard, senior currency strategist at
BNP Paribas.

Economists polled by Reuters expect 60,000 jobs were created
last month after 95,000 were lost in September, with jobless
rate seen static at 9.6 percent month-on-month. [ID:nN02101041]
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Preview of non-farm and private payrolls:


The dollar (.DXY: ) rose 0.7 percent against a basket of major
currencies, having hit an 11-month low on Thursday.

The euro (EUR=: ) was down 0.7 percent at $1.4095, while the
Australian dollar (AUD=D4: ) was down 0.5 percent after having
risen to a 28-year high earlier in the session.

World equities measured by MSCI All-Country World Index
(.MIWD00000PUS: ) dipped 0.1 percent, ending a six-day winning
streak. The index has risen 9 percent this year, though it
remains cheap with its one-year forwards price-to-earnings at
12.2 times versus a 10-year average of 15, Thomson Reuters
Datastream showed.

Emerging market shares (.MSCIEF: ) rose 0.3 percent, and have
outpaced the world index with a 16.7-percent gain for the year.

U.S. stock index futures (SPc1: ) (DJc1: ) (NDc1: ) eased 0.3 to
0.4 percent, indicating a weaker start on Wall Street.

Europe’s FTSEurofirst 300 (.FTEU3: ) index slipped 0.3
percent, while Tokyo’s Nikkei average (.N225: ) jumped 2.9 percent
and booked its best week in a year.

Oil prices (CLc1: ) broke a fourth-day winning run, down 0.3
percent, while gold (XAU=: ) eased 0.9 percent.

Yields on benchmark 10-year U.S. Treasuries (US10YT=RR: ) were
flat at 2.4907 percent, while those on 10-year German Bunds fell
2 basis points at 2.374 percent.
(Additional reporting by Kirsten Donovan, Emelia
Sithole-Matarise and Anirban Nag in London)

GLOBAL MARKETS-Stocks dip on euro zone concerns; dollar up