Investors eye U.S. jobs data

Equity markets traded slightly lower and the dollar edged up against a basket of major currencies on Friday as investors awaited key U.S. jobs data for the latest reading on the stricken U.S. economy.

Analysts predict the world's largest economy probably shed more than half a million jobs last month, bringing job losses in 2008 to a post-war record.

Forecasts range from a loss of 750,000 jobs to a decline of 400,000 in payrolls. The data is due out at 1330 GMT.

The monthly non-farm payrolls report is keenly watched because it reflects everything from business activity to likely consumer spending patterns.

"Market watchers are already prepared for bad news on the jobs front. They expect unemployment to have risen to 7 percent in December," said Linus Yip, strategist with First Shanghai Securities in Hong Kong.

Shares were generally lower.

The pan-European FTSEurofirst 300 was down about 0.2 percent and Japan's Nikkei average closed off 0.45 percent.

World stocks as measured by MSCI were headed for a weekly loss but were still up about 1.5 percent for the month to date.

On foreign exchange markets, the dollar was slightly higher against a basket of major currencies.

Grim French industrial orders data, which will likely deepen the final fourth quarter economic contraction in the euro zone's second-largest economy, helped push the euro down across the board and thereby support the dollar.

The euro was down 0.6 percent on the day at $1.3647, near a session low of $1.3633.

The U.S. unit was up 0.1 percent against the yen at 91.16 yen, off session highs but still above a trough of 90.83 yen on Thursday.

Euro zone government bonds steadied ahead of the data.

Two-year paper yielded 1.620 percent, slightly less than in late Thursday trade while 10-year cash yields were flat at 3.129 percent.

The 2-10-year yield curve flattened to 151 basis points, having hit 157 basis points on Thursday, its steepest since September 2004.