European Stocks Gain as Oil Advances, Markets Await US Payrolls Report

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European equities were slightly higher on Friday morning before a key US non-farm payrolls report, which may be crucial for Federal Reserve policymakers to determine when they are going to raise interest rates next.

Economists in a Bloomberg survey are predicting the numbers will show that the US added 180,000 jobs in August, compared with 255,000 in July.

"Markets are likely to be consolidating today in front of the report as the potential to drive interest rate expectations is elevated with the possibility of a September rate hike being on the table," Richard Perry, chief market analyst at Hantec Markets, said in an e-mailed note. "For the payrolls report, a headline number of over 200,000 would be considered to be strong, and this would drive a strong dollar on talk that it would be a trigger for a Fed rate hike."

A rebound in the oil price and commodities also underpinned the gains. Brent, the international benchmark, gained 0.2% to $45.54 per barrel and West Texas Intermediate, the US benchmark, added 0.2% to $43.26 a barrel at the time of writing.

UK homebuilders were being hit as investors questioned the merits of a recent rally, according to Mike van Dulken, head of research at Accendo Markets. Berkeley (BKG.L) fell 1.7% and Persimmon (PSN.L) declined 1.6% recently. Retirement housebuilder McCarthy & Stone (MSC.L) fell more than 10% after saying enquiries and new reservations have declined since June and the Brexit referendum will probably affect its ability to reach its annual target for volume growth, according to news reports.

UK construction companies indicated a sustained reduction in business activity during August but at a softer pace than in July, IHS Markit said, citing its latest purchasing managers' index. The PMI for UK construction was 49.2 last month, holding below the 50-mark separating expansion from contraction, compared with 45.9 in July, a seven-year low.

In equities, Adidas (ADS.DE) fell 1.3% in Frankfurt after Callaway Golf's chief executive said the firm will not bid for the German sportswear maker's golf division, Bloomberg reported. German utilities RWE (RWE.DE) and E.On (EOAN.DE) rose 2.6% and 1.8%, respectively, in Frankfurt. French water and waste management company Veolia Environment (VIE.PA) gained 3.4% in Paris.

Some other French companies advancing included hotel group Accor (AC.PA) and drugmaker Sanofi (SAN.PA,) which rose 3.3% and 1.8%, respectively.

The pan-European STOXX 600 index, Europe's main benchmark, was up by 0.2% on Friday recently and was little changed on the week. The euro-region blue-chip STOXX 50 index was 0.5% higher, Germany's DAX was little changed, the FTSE 100 was 0.3% higher in London and the CAC 40 in Paris was up by 0.5% at the time of writing.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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