News Column

European Markets Poised For A Lower Open Ahead Of US Jobs Data

September 5, 2014

PARIS (Alliance News) - The European markets are poised for a weak open on Friday, following a rally in the previous session after the European Central Bank cut the three main interest rates by 10 basis points. Investors could also exercise restraint, ahead of the US monthly payrolls data.

The central bank Thursday announced further stimulus to boost credit in the euro area economy where inflation is low and growth remains sluggish.

"The Eurosystem will purchase a broad portfolio of simple and transparent asset-backed securities with underlying assets consisting of claims against the euro area non-financial private sector under an ABS purchase programme," ECB President Mario Draghi said during his customary post-decision press conference in Frankfurt.

The DAX futures are losing 33.50 points, the CAC 40 futures are falling 17.50 points and the FTSE 100 futures are sliding 9.50 points. The Swiss Market Index futures are declining 21 points.

The European markets rallied on Thursday, after the European Central Bank announced two new programs to buy asset-backed securities and covered bonds.

The DAX added 1.02% and the CAC 40 climbed 1.65%. The FTSE 100 index gained marginally, and the Swiss Market index settled up 0.35%.

On the economic front, German industrial production grew the most since early 2012 in July, exceeding economists' expectations, data from Destatis showed.

The seasonally adjusted industrial production increased 1.9% from June, when output grew a revised 0.4%. Economists had forecast production growth of 0.4% following the original 0.3% gain in June.

At 5 am ET, Eurostat will release its final GDP report for the eurozone. GDP is expected to grow 0.7% year-over-year and stagnate quarter-over-quarter in the second quarter, confirming the flash estimates.

In corporate news, Air Berlin, Germany's second-largest airline, reported that its traffic in August 2014 increased 3% from August 2013, on a capacity increase of 1.5%.

French carrier Air France - KLM announced further reduction in its full-freighter operations, amid a slower than expected recovery in demand.

Tullow Oil agreed to sell its interests in Netherlands blocks L & Q to AU Energy B.V. for 62.7 million euros, or USD81.1 million, as the company realigns its business to focus on conventional light oil.

In Asia, markets declined again as investors paused for breath amid recent profit-taking.

The US futures indicate a lower open on Wall Street. In the previous session, stocks turned lower over the course of the trading day. The Dow edged down 0.1%, the Nasdaq slipped 0.2% and the S&P 500 dipped 0.2%.

Among commodities, crude for October delivery is rising USD0.02 to USD94.47 per barrel while gold is falling USD2.6 to USD1263.9 a troy ounce.

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Source: Alliance News

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