News Column

Coutts-Europe close: Stocks gain after ECB, US jobs

July 4, 2014



ENP Newswire - 04 July 2014

Release date- 03072014 - Europe close: Stocks gain after ECB, US jobs.

US jobs rise more than forecast in June - ECB keeps policy unchanged - Eurozone retail sales gain - Eurozone Composite PMI unrevised FTSE 100: 0.72% DAX: 1.19% CAC 40: 1.02% FTSE MIB: 0.95% IBEX 35: 0.67% Stoxx 600: 0.93% European stocks gained as a report showed US employers added more jobs in June and as the European Central Bank (ECB) decided to keep its policy unchanged.

US non-farm payrolls increased 288,000 in June, compared to 224,000 jobs a month earlier, beating the consensus of 215,000. 'The evident strength of the labour market in June is one of the key reasons why we think that the Fed will be persuaded to begin raising interest rates earlier than most expect,' according to Capital Economics.

'The unemployment rate hit a near six-year low of 6.1% last month and the average pace of job gains has accelerated to the fastest average seen in this recovery.' Another jobs report in the world's biggest economy, however, showed initial jobless claims ticked up last week, but continued to show a broad improvement in the labour market. The number of Americans filing for unemployment benefits rose 2,000 to 315,000 in the week ended June 28th, according to the Department of Labor.

The consensus estimate was for a reading of 313,000, while the previous week was revised up by 1,000 to 313,000. ECB maintains policy The ECB decided to keep its policy unchanged, as expected by analysts.

The ECB left interest rates at a record low of 0.15% after cutting it last month to address weak inflation. The monetary authority also maintained the deposit rate at -0.10% after taking it into negative territory for the first time in the history of any major central bank at its last meeting. Speaking at a press conference after the announcement, ECB President Mario Draghi again stressed that rates will remain low for an extended period of time. Draghi said ECB meetings will change to a six-week cycle as of January 2015 and will start to release minutes. 'Unfortunately for Draghi, the press conference was almost entirely overshadowed by the US jobs report which was responsible for many of big moves in the markets,' said Alpari UK analyst, Craig Erlam. 'That said, Draghi's dovish message was loud and clear and the euro didn't just slide against the dollar, which benefited greatly from the jobs report, we also saw weakness against the pound and the yen, the latter coming following an initial spike.' Also in the Eurozone, a report showed retail sales increased just 0.7% year-on-year in May after rising a revised 1.8% a month earlier.

Economists had expected a gain of 1.8%.

A final report from Markit confirmed the composite purchasing managers' index, which gauges manufacturing and services activity, came in at 52.8 in June, as expected and down from 53.5 the month before.

A reading above 50 signals expansion.

Man Group, K+S Man Group edged higher as the biggest fund at the world's largest publicly traded hedge-fund manager posted its best start to a year since 2008. K+S jumped after saying it will expand its specialty-fertiliser and salt businesses and that potash prices have started recovering. Ingenico Group advanced after the French maker of payment terminals said it is in talks to buy online payment-service provider GlobalCollect.

Balfour Beatty declined after saying profit at its engineering services unit will be lower than expected. The euro fell 0.39% to $1.3607. Brent crude futures dropped 0.479% to $110.71 per barrel, according to the ICE. RD


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Source: ENP Newswire


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