European equities trade sideways ahead of US nonfarm payrolls

Thursday, April 03, 2014

European equity markets ended today’s trading session fairly mixed. The CAC and IBEX managed to close in positive territory, gaining 0.42% and 1.4%, respectively, while the DAX and the London benchmark index ended fairly unchanged within the recent range. The euro came under further pressure trading around the 1.37 area against the US dollar, following the comments from the ECB President Mario Draghi. Draghi said the European officials are debating strongly about QE in order to fight deflation issues.  

On the macroeconomic front, the Markit Services PMI data from the UK and Eurozone was fairly modest, missing analysts’ expectations. Eurozone’s Markit services fell to 52.2 in March compared to 52.4 in February. In the UK, Markit/CIPS Services PMI declined to 57.6 in March against estimates of 58.1. However, Eurozone’s retail sales rose by 0.4% in February and the European Central Bank left interest rates unchanged at 0.25% in April.

In the US, weekly jobless claims increased by 326,000 last week against expectations of 317,000, while Challenger layoffs showed a rise of 34,399 jobs in March. The US dollar rallied on the news with the USD index surging above 80.5.    

In London, gains in energy stocks managed to offset the heavy losses across the mining and telecommunication companies. Tullow Oil surged by 6.4% following a trading update from UBS.

Tomorrow, all eyes are on the release of the US non-farm payroll data as well unemployment rate, which could provide an insight into the current US employment conditions, setting the tone for equity and commodity markets. In the UK, the main focus will turn to the Halifax house prices numbers.  

US weekly jobless claims

INJCJC Index (US Initial Jobless 2014-04-03 17-03-57

EUR Spot

EUR Curncy (Euro Spot )  2014-04-03 17-02-43

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