European market on the rise at the end of the week on new hopes
On Friday, European stock indices went up against the backdrop of a possible resumption of Russian gas supplies to Europe ahead of the release of a key monthly report on employment in the US.
By 4:00 AM ET (0800 GMT), the DAX in Germany was up 1.1%, the CAC 40 in France was up 0.5% and the UK’s FTSE 100 was up 0.5%.
Russia is poised to resume gas deliveries via a key gas pipeline to Europe, and offloading orders announced by the pipeline operator indicate that deliveries are expected to resume on Saturday at the same level as before the start of maintenance work.
The news came as relief as western European countries race to get supplies amid fears that Moscow will undertake more new supply cuts this winter.
However, market gains are limited ahead of the release of the US August jobs report at 08:30 ET (1230 GMT) – one of the last economic data the Fed will see ahead of the September meeting where it will decide about raising the base interest rate again.
U.S. nonfarm payrolls are expected to rise by 300,000 in August after rising 528,000 in July, and this release comes shortly after Fed chief Jerome Powell warned of the need for continued monetary tightening. policies to suppress inflation even at the expense of rising unemployment.
The size of the interest rate hike to be announced by the US central bank later this month is questionable, but the job growth marks the 20th consecutive month of job growth, suggesting the job market is coping with the steep rate hike already underway. .
The European Central Bank is also expected to raise interest rates next week, and with record high inflation rapidly approaching double digits, the question is whether the central bank will go for a 50 basis point rate hike, as it did in July, or more. more.
In corporate news, Lufthansa (ETR:LHAG) shares rose 1.7% despite the German airline’s pilots launching a one-day strike on Friday after a failed round of wage talks that caused hundreds of flights to be cancelled.
Shell (LON:SHEL) shares rose 1.5% after Reuters reported that the energy giant has shortlisted candidates to replace chief executive Ben van Beurden, who is set to step down in 2023.
Oil prices jumped on Friday but are still trading at a significant loss this week on fears that China’s COVID-19 lockdown and global slowdown will hurt demand.
In addition, G7 finance ministers are expected on Friday to confirm plans to impose a price cap on Russian oil in an attempt to hurt Russia’s revenues while at the same time maintaining crude oil supplies.
The Organization of the Petroleum Exporting Countries and its allies, the OPEC+ group, are due to meet early next week, and traders will be looking forward to agreeing on production levels, given top producer Saudi Arabia floated the idea of cutting supply earlier in the week.
By 4:00 AM ET (0800 GMT), US WTI futures rose 2% to $88.33 a barrel, while Brent crude rose 1.8% to $94.08. Both benchmark contracts fell 3% in the previous session to a two-week low and could drop by about 5% for the week.
In addition, gold futures rose 0.2% to $1,713.05 an ounce, while EUR/USD rose 0.4% to hit 0.9989.