European Shares Likely To See Cautious Opening

European stocks are likely to open on a flat note Friday as investors await key U.S. jobs data due later in the day for important clues about the Fed’s tapering timeline.

Economists currently expect employment to jump by 750,000 jobs in August after surging by 943,000 jobs in July. The unemployment rate is expected to dip to 5.2 percent from 5.4 percent.

Fed officials have indicated inflation has reached their target but they need to see further improvement in the labor market before they begin tapering asset purchases and raising interest rates.

The monthly jobs report is likely to overshadow a separate report on activity in the service sector.

The latest survey from Caixin revealed earlier today that the services sector in China dropped into contraction territory in August with a services PMI score of 46.7, down sharply from 54.9 in July.

Closer home, final purchasing managers’ survey results and retail sales from the euro area are due later in the session, headlining a light day for the European economic news.

Asian markets traded mixed, with Japan’s Nikkei index rallying about 2 percent after Prime Minister Yoshihide Suga indicated he will step down as prime minister later this month.

Chinese and Hong Kong stocks were moving lower on concerns that Alibaba Group Holding’s $15.5 billion pledge to Beijing’s “common prosperity” vision would hit profits in coming years.

The U.S. dollar sank to its lowest in almost a month against major rivals and U.S. 10-year Treasury yields remained pressured for third consecutive day, while crude oil held steady following overnight gains on bets that the market can absorb additional supply from OPEC+ as the U.S. Gulf grapples with Hurricane Ida’s impact.

U.S. stocks eked out modest gains overnight as jobless claims and trade balance figures showed that the economic recovery remains on track.

The tech-heavy Nasdaq Composite edged up 0.1 percent and the S&P 500 rose 0.3 percent to reach new record closing highs while the Dow gained 0.4 percent.

European stocks ended Thursday’s session slightly higher despite doubts over monetary policy outlook and signs of slowing global growth.

The pan European Stoxx 600 advanced 0.3 percent. The German DAX and France’s CAC 40 index both inched up 0.1 percent, while the U.K.’s FTSE 100 rose 0.2 percent.

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