* Euro hits a four-month low vs dollar on debt worries
* Expectations high for U.S. Dec non-farm payrolls
* World stocks, copper and gold fall
By Dominic Lau
LONDON, Jan 7 (Reuters) - The euro fell to a four-month low
against the dollar on Friday ahead of U.S. jobs data and next
week's bond issues from euro zone peripheral countries, while
world stocks and copper eased.
A surprise sharp increase in U.S. private sector job
creation in December have raised expectations of stronger
non-farm payrolls for the month, with economists now expecting
175,000 jobs were created, up from 140,000 earlier.
The broader hopes that has prompted of a more sustained
economic recovery continued to boost the dollar ahead of the
data, due at 1330 GMT.
Many analysts, however, said markets had become so upbeat on
the payrolls that there was scope for disappointment. Some
pointed to a note of caution from new U.S. claims for jobless
benefits, which rose more than expected last week.
"The consensus estimates suggest that U.S. non-farm payroll
figures will show a rise of about 175,000, but the whisper
figure is far higher than that. I think you have some room for
disappointment," said Koen De Leus, strategist at KBC Securities
in Brussels. "If it's a blow-out (high) figure, then the
positive momentum can go on for a while."
European shares eased, while U.S. stock index futures <SPc1>
<DJc1> <NDc1> were down about 0.2 percent.
The dollar gained 0.3 percent against a basket of major
currencies <.DXY>, and 0.2 percent to 83.53 yen <JPY=>.
The euro <EUR=> dropped 0.2 percent to $1.2975 after trading
as low as $1.2965 on trading platform EBS, its lowest since
mid-September.
Copper hit two-week low on talk that top consumers China may
be preparing to tighten monetary policy, and gold slipped for
the fifth day in a row.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
US non-farm payrolls preview graphic:
http://r.reuters.com/quv94r
Jobless claims: http://r.reuters.com/sev94r
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
EURO ZONE PERIPHERALS
Investors sold bonds of the most indebted euro zone
governments before a series of issues next week. An EU proposal
that could force those who lend to banks to bear big losses
should they fail also helped knock the single currency lower
across the board. []
Portugal, widely seen as the next euro zone state at the
risk of needing a bailout after Greece and Ireland, will lead a
series of debt auctions from European nations next week.
[]
"Next week's supply in Spain, Portugal and Italy will be a
good test of investor sentiment," said Nick Stamenkovic,
strategist at RIA Capital Markets in Edinburgh.
Yields on Portugal's 10-year government bonds over benchmark
German Bunds <PT10YT=TWEB> <DE10YT=TWEB> rose 15 basis points to
433 bps, while those on 10-year Spanish bonds <ES10YT=TWEB> over
Bunds widened by 6 bps to 264 bps. The five-year cost of
insuring Portugal's debt against default rose 15 bps to 540 bps.
Portuguese stocks <> fell 1.2 percent and Spain's blue
chips <> dropped 1.5 percent, while the pan-European
FTSEurofirst 300 <> index shed 0.4 percent.
"The rising yields at debt auctions in the euro zone will
continue to spook investors for a while, and it's best to stay
away from peripheral stocks such as Spanish and Portuguese banks
until mid-year when the crisis should ease," said Arnaud
Scarpaci, fund manager at Agilis Gestion in Paris.
World stocks measured by MSCI All-Country World Index
<.MIWD00000PUS> slipped 0.3 percent, down for the third straight
session. In Asia, Japan's Nikkei average <> edged up 0.1
percent to a fresh eight-month closing high.
Copper <CMCU3> fell for the fourth straight session, down
1.5 percent and was set for a 2.7 percent drop for the week.
Gold <XAU=> eased 1 percent and is down 4.2 percent this week.
(Additional reporting by Anirban Nag, William James and Atul
Prakash in London; Graphic by Stephen Culp; editing by Patrick
Graham)
