Optimism Returns Before US Jobs Report

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EUROPEAN SCHOLARSHIPS ARE ON THE RISE

by Laetitia Volga

PARIS (Reuters) – The main European stock markets opened higher on Thursday taking advantage of the positive direction of Wall Street futures before the publication of the highly anticipated monthly employment report in the United States which should, unless surprised, confirm the recovery economy.

In Paris, the CAC 40 index gained 1.37% to 4,994.48 points around 08:10 GMT. In Frankfurt, the Dax takes 1.76% and in London, the FTSE takes 0.88%.

The EuroStoxx 50 index for the euro zone posted a gain of 1.55%, the FTSEurofirst 300 rose by 1.12% and the Stoxx 600 by 1.08%.

European markets are moving forward the day after a session in slight decline due to persistent concerns about the outbreak of coronavirus cases, particularly in the United States, where a new daily record was reached with 48,000 new cases identified on Wednesday .

The good macroeconomic news that multiplied on Wednesday, however, seems to be gradually gaining ground in the minds of market participants.

Whether it was the ADP monthly survey of employment in the United States, the Chinese and European PMI indices or the American ISM in the manufacturing sector, all confirmed a recovery in activity in June.

The official US employment report, expected at 12:30 p.m. GMT, could follow the same trend. Economists polled by Reuters are counting on 3.0 million job creations last month, which would mark a record since the start of this statistic in 1939.

“Investors should take advantage of the good news as well as the bad news for a while longer because it provides more stimulus, the essence of today’s financial markets. We should see a sharp increase in non-agricultural job creation as well as an upward revision of previous figures in the United States. This information should provide an opportunity for the indices to progress and for the Nasdaq to reach a new historic high, “said Vincent Boy, analyst at IG France.

The market will also learn about jobless claims last week in the United States and orders from industry.

VALUES

All European sectors are moving up: the Stoxx health index (+ 0.01%) and that of banks up 3.36%.

In Paris, Unibail-Rodamco-Westfield (+ 3.54%) leads the ACC ahead of Accor (+ 4.91%) and Renault (+ 3.93%).

British Associated British Foods jumped 7.41%, the largest increase for the Stoxx 600, after saying that sales at Primark ready-to-wear stores have been encouraging since the reopening.

IN ASIA

In Tokyo, the Nikkei index rose 0.11%, supported by the rise in cyclical stocks with hopes of an economic recovery, although many investors remained on the sidelines before the publication of the US employment report.

In China, the CSI 300 of large caps (+ 2.07%) ended at a high since the end of January 2018 and the Shanghai composite index gained 2.13%, as Beijing announced new support measures against the coronavirus crisis.

A WALL STREET

Futures on the American indices prefigure an opening up from 0.5% to 0.8% after the hesitant session of the previous day.

On Wednesday, the New York Stock Exchange ended in scattered order, the Dow Jones closing down 0.3% while the S&P 500 (+ 0.5%) and the Nasdaq (+ 0.95%) ended the day on the rise, both supported by hopes of finding a coronavirus vaccine. [.NFR]

A renewed appetite for risk was felt thanks to announcements from the laboratories Pfizer (+ 3.18%) and BioNTech (-3.9% after gaining up to 18.9%) concerning encouraging preliminary results for their candidate vaccine against the coronavirus in the first human trials.

RATE

Sovereign bond yields are almost stable, but the trend could change when the American employment report is published.

The yield on 10-year Treasuries fell slightly to 0.6759% and in Europe, that of German 10-year paper fluctuated around -0.398%.

CHANGES

The dollar, which is losing its appeal with the renewed risk appetite, lost 0.24% against a basket of international currencies and moved to a week low.

The euro takes 0.24% returning to 1.1277 dollar.

OIL

Oil prices are up on Thursday, pulled up by better economic indicators and the decline in US stocks although the evolution of the coronavirus epidemic, with the closure of certain public places in California, limits gains.

The barrel of Brent gained 1.05% to 40.24 dollars and that of light American crude took 1.14% to 42.51 dollars.

METALS

In Shanghai, the August expiry contract for copper hit a high of more than six months, at 7,015.98 dollars per ton, supported by hopes of economic recovery and fears about supply in Chile, where the giant Miner BHP said it would slow production at its Cerro Colorado copper mine.

(Laetitia Volga, edited by Blandine Henault)

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