PARIS: Europe stock markets moved firmly higher in early trade on Friday, with investors hoping the U.S. nonfarm payrolls report later will offer clues to the Federal Reserve’s plans for a rate hike.
The Stoxx Europe 600 index SXXP, +1.56% jumped 1.1% to 350.12, swinging it into positive territory for the week.
On Thursday, early gains fizzled in the afternoon, with the pan-European benchmark ending 0.4% lower after investors turned their focus back on the slower global growth outlook.
“Now all the markets have to do [on Friday] is hold on to these gains, something they couldn’t manage yesterday and something that has the added obstacle of a nonfarm jobs report that could see a big shift in sentiment dependent on its strength,” said Connor Campbell, financial analyst at Spreadex, in a note.
Investors on both sides of the pond were eagerly awaiting the U.S. jobs report for September, out at 8:30 a.m. Eastern Time, or 1:30 p.m. London time, for signals on the timing of the first Federal Reserve rate hike in almost a decade.
While the U.S. economy has been improving recently, the Federal Reserve at its latest meeting raised concerns about the potential impact from slower growth in emerging markets and volatile commodity prices. Traders will therefore watch for any signs of strength or weakness in the labor market that could sway the Fed’s interest-rate decision. Read: Here’s what to watch in the September jobs report
Federal Reserve Bank of San Francisco President John Williams said late Thursday that a payrolls number “above 100,000 or 150,000 would be good to me.” Both Williams and his Richmond counterpart Jeffrey Lacker have suggested a rate rise in October is a possibility.
Economists polled by MarketWatch expect 200,000 jobs to have been added to the economy last month.
