European stocks expected to have best week since March as markets climb

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European stocks floated below all-time highs on Friday after Wall Street set a new closing high in the previous session as investors wait for crucial US employment figures later today.

The regional Stoxx 600 index traded in a narrow range, leaving it on track for its best week in five months after managing to hit a new high every day since Monday. The UK’s FTSE 100 rose 0.1% after the Bank of England left policies unchanged on Thursday, but shifted to a slightly more hawkish tone.

All eyes will be on Friday’s US jobs report for July, the latest before the Jackson Hole summit of global central bankers at the end of the month. Economists polled by Reuters expect the world’s largest economy to create 870,000 new jobs – an increase from June’s hit figure of 850,000, while the unemployment rate is expected to drop to 5.7 %, compared to 5.9% in June.

A high number of jobs will intensify the debate over when the US Federal Reserve will begin to curb its ultra-support policies as the economic recovery from the pandemic gathers pace. The world’s largest central bank has kept interest rates at historically low levels and bought $ 120 billion in assets per month throughout the Covid-19 crisis.

“Today’s employment figures. . . have the potential to shape the cone debate over the next few months, especially since it’s the last before Jackson Hole, ”wrote Jim Reid of Deutsche Bank.

Fed Chairman Jed Powell said last week that “the job market still has some way to go” and the current rate “still underestimates the lack of jobs.” However, other members of the Fed’s policy committee took a more hawkish tone about the recovery in comments earlier in the week.

Bonds fell, pushing the yield of the benchmark 10-year US Treasury index up 0.04 percentage points to 1.25% on Friday. Yields increase as prices fall. The equivalent German Bund yield rose 0.01 percentage point to minus 0.48 percent while the UK 10-year gilt gained 0.03 percentage point to 0.55 percent.

Futures contracts on the S&P 500 and Nasdaq Composite indexes were little changed. US markets hit new all-time highs on Thursday as investors anticipated employment data and weighed on a bumper earnings season for companies on both sides of the Atlantic. Goldman Sachs analysts said this week they expected the blue-chip S&P 500 index to gain another 7% by the end of 2021, in addition to the 17% rise recorded until here.

Asian markets were muted after a turbulent week, as investors analyzed statements from the ruling party in China to try to determine which sectors could be targeted next as Beijing seeks to assert greater control over key elements of the ‘economy. Tech stocks, tutoring and games have all been hit in recent weeks. Hong Kong’s Hang Seng index drifted on Friday while China’s CSI 300 index fell 0.6%.

Elsewhere, benchmark Brent crude rose 1.1% to $ 72.08 a barrel, ending a volatile week where prices fell about 5%, heading for its worst week since March, fearing as the spread of the Delta coronavirus variant and new travel restrictions ease. request.