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European stocks gain, currencies mixed amid lingering protectionism concerns

? Trade concerns remain center stage.

? Emerging-market currencies recover.

? Swedish krona drops as central bank postpones rate hike.

? Investors await U.S. employment and payrolls data.

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Wall Street is set to open higher, shrugging off trade concerns and weakness seen in the technology sector yesterday after the congressional testimonies of Facebook Inc. and Twitter Inc. executives in Washington, D.C.

Facebook shares closed 2.33% lower yesterday while Twitter slumped 6.06%. Executives acknowledged that the two social media companies did not do enough to prevent a foreign-backed misinformation campaigns on their platforms during the 2016 U.S. election. The Nasdaq 100 dropped 1.30% but futures point to the tech-heavy index opening slightly higher this morning.

The FTSE 100 erased earlier gains to drop 0.13% as of 6:32 a.m. ET, while Germany's DAX ticked up 0.09% and France's CAC 40 rose 0.21%, buoyed by a 6% gain in shares of aerospace company Safran SA, which raised its full-year outlook. In Asia, the Shanghai SE Composite fell 0.47% and Hong Kong's Hang Seng lost 0.99% as a public consultation on President Donald Trump's proposals for 25% tariffs on $200 billion worth of Chinese imports ends today.

China will be monitoring the impact of any fresh tariffs from the U.S. on their economy and will be forced to retaliate, China's ministry of commerce said. The U.S. recorded a trade deficit of $34.14 billion against China, data showed yesterday.

"Worries about protectionism have clearly weighed on equity markets in much of the world recently, and this will probably remain the case," Capital Economics' Oliver Jones wrote. "What's more, we suspect that protectionism concerns will start to take a toll on the U.S. stock market, which has generally shrugged them off so far."

S&P Global Ratings warned that the ongoing trade dispute between the U.S. and China could turn into a full-blown trade war and shave off about 1 percentage point off U.S. GDP growth by 2021.

Fresh tariffs on China are also likely to hit the G-10 currencies, TD Securities said, noting that most of the 10 most heavily traded currencies worldwide have shown a rising sensitivity to the recent sell-off in emerging-market currencies. The Canadian dollar was flat against its U.S. counterpart after Canadian Foreign Minister Chrystia Freeland cited progress in negotiations regarding a trade agreement with the U.S., though certain issues remain.

Sweden's central bank held its key rate and signaled that a rate hike could happen in February 2019, sending the krona down 0.50% against the dollar. The Japanese yen and the pound each appreciated 0.2% against the dollar, while the euro fell 0.09%.

Among emerging-market currencies, the South African rand recovered 0.43%, the Mexican peso rose 0.21% and the Indonesian rupiah appreciated 0.47% against the dollar, though ING strategists expect the rebounds to be short-lived and narrow against the trade backdrop.

U.S. Treasurys held their ground, with 10-year yields at 2.90% ahead of employment and payroll data due later today. Italian government bonds gained, with 10-year yields shedding more than 5 basis points to hit 2.89%. Deputy Prime Minister Matteo Salvini has said he would respect the European Union's budget rules, Politico reported.

Brent crude oil gained 0.31% to $77.51 per barrel on the ICE Futures Exchange. Gold climbed 0.69% to $1,204.95 per ounce.

More from S&P Global Market Intelligence:

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US senator to introduce bill allowing court selection in securities fraud cases

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The day ahead:

8:15 a.m. ET — U.S. ADP employment report (Econoday consensus: 182,000)

8:30 a.m. ET — U.S. jobless claims (Econoday consensus: 213,000)

8:30 a.m. ET — U.S. productivity and costs (Econoday consensus: nonfarm productivity 3.0% quarterly, unit labor costs -1.0% quarterly)

9:45 a.m. ET — U.S. PMI services index (Econoday consensus: 55.2)

10 a.m. ET — U.S. Fed's John Williams speaks

10 a.m. ET — U.S. factory orders (Econoday consensus: -0.7% monthly)

10 a.m. ET — U.S. ISM non-manufacturing index (Econoday consensus: 56.8)

10:30 a.m. ET — U.S. EIA natural gas report

11 a.m. ET — U.S. EIA petroleum status report

11 a.m. ET — Global composite PMI

11 a.m. ET — Global services PMI

4:30 p.m. ET — U.S. Fed balance sheet and money supply

7:30 p.m. ET — Japan household spending (Econoday consensus: -1.0% yearly)

S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.