News Column

European Stocks Seen Little Changed Before US Jobs Data

July 2, 2014

VIENNA (Alliance News) - European stock index futures point to a flat open on Thursday ahead of a European Central Bank meeting and the key US jobs report for June due out later in the day.

In the run-up to the payrolls report, overnight data showed that US private sector employment rose much more than expected to 281,000 jobs in June, fueling hopes that the American economy is gathering pace after a weak start to the year. The nonfarm payrolls, meanwhile, is expected to show an addition of 215,000 jobs in June, compared to 217,000 jobs a month earlier. The unemployment rate is expected to remain at 6.3%.

Besides the all-important jobs data, PMI data from major European economies, a report on Eurozone retail sales and US reports on weekly jobless claims, international trade and service sector activity may influence investor sentiment as the day progresses.

The European Central Bank is expected to announce its rate decision at 7:45 am ET. The central bank is expected to keep its monetary policy on hold after unveiling a host of stimulus measures in an unprecedented move last month.

The Asian markets are turning in a mixed performance as caution set in ahead of the US payrolls report due out later in the day. Data out of China painted a mixture picture of the world's second-largest economy, with the official non-manufacturing purchasing managers' index dropping to 55 points in June from a six-month high of 55.5 in May, while the services PMI index compiled by HSBC/Markit hit a 15-month high of 53.1 in the month, adding to signs of stabilization in the economy.

The Australian dollar lost ground as the country's central bank governor said the currency exchange rate was far too high. The safe-haven Japanese yen eased slightly and gold slipped to hover below a three-month high while Brent crude prices eased further to fall to a three-week low on easing concerns about the Iraqi crisis and amid prospects for increased exports from Libya.

In corporate news, Nokia's mapping unit, HERE, said it has completed the acquisition of Medio Systems Inc., a Seattle-based company that is a pioneer in the emerging field of real-time predictive analytics.

UGI Corp's wholly-owned French subsidiary, UGI Bordeaux Holding, has agreed to buy energy giant Total SA's liquid petroleum gas distribution business in France for as much as 400 million to 450 million euros.

Russian state oil company OAO Rosneft has submitted a deal to buy an oil trading unit of Morgan Stanley to a confidential US committee that weights national security risks, the Wall Street Journal reported, citing a person familiar with the matter.

The major European markets closed mixed on Wednesday as investors remained nervous about ongoing tensions in Iraq and waited for the European Central Bank's monthly policy meeting for directional cues. The German DAX edged up 0.1% and the UK'sFTSE 100 rose 0.2%, while France's CAC 40 dropped 0.4%.

US stocks ended narrowly mixed showing little change overnight, though the Dow and the S&P 500 set fresh record closing highs as investors digested a positive reading on private sector employment.

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Source: Alliance News

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