AFP, LONDON:  European and Asian equities rose yesterday following a healthy lead from Wall Street overnight, as markets looked ahead to key US jobs data.
The S&P 500 hit a seven-month high Thursday following solid gains, with investors expressing a confident mood before publication of June jobs figures from the world’s biggest economy.
The upbeat outlook was also evident in oil markets, with prices sitting around the $50 mark after OPEC’s refusal to cap output was offset by a fall in US stockpiles.
On Thursday, the European Central Bank meanwhile raised slightly its growth and inflation forecasts for the eurozone this year, even as it gave no new policy direction.
Around midday in Europe on Friday, Frankfurt’s main stocks index was up 0.5 per cent compared with Thursday’s close.
Paris won 0.4 percent, while strong gains for London’s heavyweight oil and commodities sectors helped to hand the benchmark FTSE 100 index a 1.0-per cent rise.
“Despite there being several major macroeconomic events yesterday, the overall reaction was fairly subdued (Thursday) and focus now shifts to today’s US non-farm employment report as a possible catalyst to jolt the markets,” said David Cheetham, market analyst at XTB trading group in London.
Expectations are high for a June or July US rate hike after Federal Reserve chair Janet Yellen recently said that such a move could be justified “in the coming months”, citing solid US economic growth and a strengthening labour market. US investors meanwhile provided a perfect platform for their Asian counterparts, as Tokyo’s main stocks index ended 0.5-per cent higher yesterday.
With US borrowing costs tipped to rise this summer, the dollar has managed to hold up, although fading hopes for any fresh Japanese stimulus continue to put weight behind the yen.
“If the payrolls tonight are strong, we’ll see markets further price in a rate hike... giving the dollar a bit of a boost,” said Yusuke Kuwayama at Tokio Marine & Nichido Fire Insurance in Tokyo.
In Europe, Germany’s central bank on Friday said the country’s economy would grow slower than expected this year and next.
The central bank of neighbouring France also turned more pessimistic on the growth outlook for its economy.
All eyes remain fixed on the pair’s key trading partner Britain, which votes June 23 on whether to remain part of the European Union. The pound, which fell sharply earlier in the week on voter uncertainty, continued to claw back ground against the dollar and euro on Friday. Prime Minister David Cameron on Thursday urged Britons not to “roll a dice” by leaving the EU in his first television grilling of the referendum campaign, three weeks before the tight vote.