World share prices rose while bonds fell on Friday as investors positioned for the possibility of strong U.S. jobs data, which would bolster the view of a recovering global economy and further boost riskier assets.
Oil prices rose, poised for second straight week of gains on concerns over escalating political unrest in Egypt. Chaos in Egypt has highlighted volatility in the Middle East and North Africa, which together produce more than a third of the world's oil.
The euro struggled after comments from European Central Bank President Jean-Claude Trichet the previous day scaled back some speculation of an interest rate rise in the coming months, while the dollar edged up ahead of data on U.S. non-farm payrolls.
The data, which is due at 1330 GMT, is forecast to show the economy created 145,000 new jobs last month, after a rise of 103,000 in December. A strong reading will add to the view the U.S. economy is recovering, which may boost share prices.
Currency analysts said this could add to the dollar's recovery from its sell-off in the past month, after investors bought back the U.S. currency the previous day during the euro's slide.
Our U.S. economics team expects a more positive outcome forecasting 160,000 jobs. Given such a number, we look for a continuation in yesterday's dollar relief-rally with the euro eyeing support at $1.3550, said Adam Myers, senior currency strategist at Credit Agricole.
The euro was flat on the day at $1.3635, while the dollar was unchanged at 77.730 against a currency basket <.DXY>.
EGYPT IN FOCUS
The FTSEurofirst 300 index <.FTEU3> rose 0.3 percent in early European trade. The index hovered near its highest intraday level in more than two years hit last month.
The MSCI world equity index rose 0.3 percent, sticking close to a 2 1/2-year high hit earlier this week.
Stocks extended gains after U.S. Federal Reserve Chairman Ben Bernanke on Thursday said the economy still needs help from the central bank, which was taken as a sign that monetary policy will remain accommodative for now.
Quite clearly, equities are deriving substantial benefit from Fed monetary policy, said Jeremy Batstone-Carr, strategist at Charles Stanley.
By keeping quantitative easing on the go, the Fed is effectively forcing investors to buy the equity market. You might as well buy high beta, and get on with it.
German Bund futures slid to 122.95, 22 ticks lower on the day while the price of other safe-haven assets such as U.S. Treasuries and Japanese government bonds also fell as investors priced in the possibility of buoyant payrolls.
Even as investors expect the global economy to continue recovering, many were keeping an eye on political unrest in North Africa and the Middle East, which was supporting oil prices and overall commodities.
Egyptians fighting to oust President Hosni Mubarak hoped to rally a million people on Friday as the United States worked to convince the 82-year-old leader to begin handing over power.
Brent crude for March slipped 0.2 percent to $101.50, but prices hovered in range of their strongest intraday level in more than two years hit earlier this week.
U.S. crude oil rose a touch to $90.63 per barrel.
Other commodities were firm on Friday, which wheat and corn prices on track to gain around 3 percent this week.
(Additional reporting by Anirban Nag and Brian Gorman; Editing by Toby Chopra)