European stocks bounce back before US jobs data

GMT 14:30 2014 Friday ,05 December

Arab Today, arab today European stocks bounce back before US jobs data

London's benchmark
London - AFP

European stock markets rebounded on Friday following heavy losses the previous day, as investors closed out the trading week looking ahead to key US jobs data.
London's benchmark FTSE 100 index climbed 0.75 percent to stand at 6,729.62 points around midday in the British capital.
Frankfurt's DAX 30 surged 1.41 percent to 9,990.11 points and the CAC 40 in Paris rallied 1.39 percent to 4,383.82 compared with Thursday's close.
Europe's equity markets had slumped on Thursday after the European Central Bank disappointed markets eager for central bank stimulus to revive the stalling eurozone economy, traders said.
Investors on Friday "responded to reports that emerged after the close on Thursday that claimed the ECB is preparing a broad based quantitative easing (stimulus) package for January", said Craig Erlam, market analyst at Alpari traders.
"With the US jobs report to come today, the ECB is likely to slip to the back of people’s minds as attention turns to the US economy and when we will see the first rate hike since June 2006.
"The Federal Reserve is the clear front runner to raise interest rates first of the major central banks, with the UK the only other one also close to doing so, but that looks to have been put back," he added.
An alarming drop in eurozone inflation in recent months has increased pressure on the ECB to undertake massive stimulus measures like central banks in Britain, Japan and the United States have done.
Sliding oil prices have contributed to the drop in inflation, while there are worries that the eurozone may even fall into a period of deflation, or falling prices.
Inflation refers to when prices of goods and services rise, albeit at a slower pace.
Deflation meanwhile may sound good for the consumer, but falling prices can trigger a vicious spiral where businesses and households delay purchases, throttling demand and causing companies to lay off workers.
The ECB on Thursday held its main "refinancing" rate steady at 0.05 percent, as expected at its monthly policy meeting.
But while its chief Mario Draghi said the ECB has stepped up preparations for more anti-deflation measures, these will be reassessed only in January.
The euro fell in Friday trading to $1.2355 compared with $1.2380 late in New York on Thursday. The European single currency had fallen to a two-year low of $1.2280 on Thursday as traders foresaw no action by the ECB until next year.
The dollar reached a new seven-year high at 120.45 yen on Friday.
Gold fell to $1,204.50 an ounce from $1,209 Thursday on the London Bullion Market.


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