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Euro markets closed with strong gains – Dax ‘jump’ over 3%

Euro markets closed with strong gains on Friday, snapping a five-session losing streak, as investors weighed data released earlier today in the US labor market.

The data showed that the US economy continued to add new jobs in August, although the pace slowed compared to the previous month, while wages continued to be on an upward trajectory.

In particular, jobs in the economy increased by 315,000 last month, after the rise of 526,000 jobs in July, as the US Department of Labor announced today. July’s reading was revised slightly lower than the original figure of 528,000.

The unemployment rate, meanwhile, rose to 3.7% from 3.5% as the labor force participation rate strengthened. The participation rate climbed to 62.4% from 62.1%.

The average estimate of analysts in a Bloomberg poll was for 300,000 jobs, with unemployment remaining at 3.5%.

Hourly wages rose 0.3% in August to $32.36, with overall growth over the past year reaching 5.2%, among the biggest increases since the early 1980s.

These data are at the heart of the Federal Reserve’s analysis of the path of the economy and are expected to largely determine its decision on the size of the next interest rate increase.

Global markets have been “unsettled” since last Friday following “hawkish” statements by Fed Chairman Jerome Powell and other central bank officials, who said the Fed will use all tools to tame inflation.

European stock markets also got off to a negative start in September on Thursday, with the Stoxx 600 closing down 1.8%, having closed August in the red.

Investors in Europe, however, face downward pressure from the growing prospect of recession in the eurozone and the UK, with energy shortages from Russia’s war in Ukraine fueling a cost-of-living crisis and soaring inflation.

On the board today, however, Stoxx 600 It rose 2.04% to 415.97, with the auto sector up 3.8% to lead the gains as all sectors moved into the green. At the same time, the other pan-European Stoxx 50 gained 2.54% to 3,544.38 points.

In the rest of the board, the German DAX “jumped” 3.33% to 13,050.27 units, the British FTSE 100 and the French added 1.83% to 7,279.30 units CAC-40 gained 2.21% to 6,167.51 points.

The picture was similar in the region, where the Spanish IBEX-35 closed at 7,932.20 points with an increase of 1.62% while the Italian FTSE MIB strengthened by 2.91% to 21,921.26 units.

Back in Europe, data out today showed producer prices jumped again in July, confirming concerns that inflationary pressures are not expected to ease soon.

In particular, producer prices increased in July by 4.0% in the Eurozone and by 3.7% in the EU. compared to June, as announced by Eurostat. This follows June’s rise of 1.3% and 1.5% respectively.

From July 2021, producer prices jumped 37.9% in the Eurozone and 37.8% in the EU.

The data comes just ahead of the European Central Bank’s meeting next Thursday with several analysts not ruling out a mammoth 75 basis point hike in interest rates after a barrage of aggressive statements from central bank officials about the need to do more to to control inflation.

In business news, Shell Chief Executive Ben van Beurden is set to step down next year and the company has selected four potential successors, Reuters reported on Friday, citing two company sources. The 64-year-old Dutchman has been at the helm of the oil major since January 2014, having joined the company in 1983.

Source: Capital

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