European Stocks Calm; Payrolls and ECB Stimulus in Focus

European stock markets

European Stocks Calm; Payrolls and ECB Stimulus in Focus

European stock markets traded largely unchanged Thursday, with investors displaying caution ahead of Friday’s key U.S. payrolls release while European Central Bank members discussed withdrawing monetary stimulus. At 3:40 AM ET (0840 GMT), the DAX in Germany traded 0.1% higher, the CAC 40 in France rose 0.1%, while the U.K.’s FTSE 100 dropped 0.1%, with mining heavyweight BHP  weighing as it went ex-dividend.

The rebound in the Eurozone economy, coupled with a sharp rise in inflation, has brought the subject of the ECB’s extraordinary monetary support back into debate, to the possible detriment of the region’s stock markets.

Earlier this week, inflation in the euro region jumped to 3%, well above the ECB’s goal, and this prompted Jens Weidmann, the head of the Bundesbank, to talk on Wednesday about scaling back this stimulus.

While Weidmann and fellow hawks Robert Holzmann and Klaas Knot are typically in a minority on the ECB’s governing council, the accounts of the ECB’s last meeting included the clearest acknowledgement of excessive inflation risks since the start of the pandemic 19 months ago.

The region’s July PPI number, due for release at 5 AM ET (0900 GMT), will be carefully studied.

The week’s major focus, though, is Friday’s release of the key August monthly U.S. employment report as this could guide future Federal Reserve policy.

Back in Europe, Swedish Orphan Biovitrum  stock soared 24% after U.S. venture capital firm Advent International and Aurora Investment offered to buy the drugmaker.

Ryanair stock rose 0.6% after the budget airline, Europe’s largest by passenger numbers, said it flew 11.1 million passengers in August, above target and 75% of the number it carried in August 2019 before the Covid-19 pandemic, while British engineering firm Melrose Industries  stock climbed 4.2% as it reported a first-half profit.

The FTSE MIB climbed up by  0.22% to 26,238.30. In the cash markets, the DAX  Germany was trading up 0.23%  to 15,860.65. CAC 40  in France  rose  by 0.23 % to 6,774.22 while the FTSE 100  in the U.K. were up by 0.05% to 7,153.35. ,at the time of writing.

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