* STOXX 600 up 0.5%
* Traders wait for Scottish election results
* U.S. jobs in focus
* Wall Street futures tick up
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HOW LONG WILL PENT-UP DEMAND LAST? (0917 GMT)
It’s probably not such a thorough test for post-pandemic
economic growth and inflation, but high-frequency data can give
interesting clues about the expected recovery.
Over the next few months, the market “focus will
increasingly shift to what the steady-state in the post-COVID
economy will look like,” according to Deutsche Bank, which
highlights data from two countries that have already gone
through the boom phase of the re-opening.
After a few weeks of a solid rebound in Israel, restaurant
spending is back to where it was when the lockdowns started (see
Retail sales in Australia stabilized after a short initial
boom (see chart below).
Interestingly, the state that got hit harder with COVID,
Victoria, saw the biggest subsequent boom but equally the most
EUROPEAN STOCKS RISE ON RESULTS, M&A (0733 GMT)
European stocks are slightly higher on some solid earnings
and M&A expectations, ahead of key employment U.S. data due this
The Stoxx 600 index is up 0.3% with oil and gas
stock index leading gains up 0.7% on oil prices recovery
on buoyant economic data from China and the U.S.
Meggitt shares soar 14% to March 2020 highs, with
traders citing a report that Woodward is looking at the
U.K. firm for a potential M&A deal.
Shares in Adidas <ADSGn.de are up around 7% after the
company raised its 2021 sales outlook, while Siemens shares rise
2% after the company upped its guidance while warning about
tightening supply chain.
British Airways-owner IAG is down 0.2% as the
company remained cautious on short-term flying recovery.
The market overnight seemed to like comments from Fed
governor Raphael Bostic who said a million or more jobs were
likely created in April would not be enough to push the Fed to
begin discussing scaling back its asset purchases.
According to a Reuters poll, economists expect 978,000 new
U.S. jobs for April, but Deutsche Bank expects 1.275 million.
TAPERING THE TAPER TALK (0708 GMT)
A million or more jobs added in April won't be enough to
trigger the Fed to ponder its bond purchases is what Atlanta
Fed's President Raphael Bostic said on Thursday, but markets
appear to be wanting to front run any potential tapering with
the S&P 500 stopping just shy of record highs.
The non-farm payrolls report due later today is likely to
set the tone for markets - especially U.S. Treasuries, which
traded in a tight range this week. Estimates for jobs created in
April range widely between 700,000 and more than 2 million.
The reflation trade has been the only game in town as
vaccinations gather pace and that's also supporting the red-hot
rally in commodities that shows no signs of abating with oil,
iron ore and copper all rising sharply. And those markets will
be underpinned by China extending its impressive trade
performance in April with exports jumping a third and import
growth at a decade high.
In more good news, earnings season is continuing to surprise
on the upside in Europe and the United States. German sportswear
company Adidas said it expects strong demand for its
products despite supply chain issues and lockdowns in Europe.
Similarly, Siemens raised its outlook even as it
flagged tightening supply chains.
Those strong earnings prints are set help Europe's benchmark
STOXX 600 index to open at record highs. U.S. stock
futures are also ticking higher.
Elsewhere, the world's second-largest cryptocurrency Ether
hit yet another record high, taking year-to-date
gains to over 385%, as investors diverted focus from its main
Key developments that should provide more direction to
markets on Friday:
- Credit Agricole posts 64% jump in profits
- BMW confirms outlook, but says rest of 2021 to be volatile
- British Airways cautious on short term flying recovery
- ECB President Christine Lagarde speaks at 1000 GMT
- US non-farm payrolls data 1230 GMT
- US earnings: Cigna, Fluor
EUROPE IN THE BLACK BOOSTED BY STRONG DATA (0528 GMT)
European stock futures are well in the black as a batch of
economic data worldwide boosted expectations that a solid
economic recovery is already underway.
Wall Street rallied overnight after the number of Americans
filing new claims for unemployment benefits fell below 500,000
last week for the first since the pandemic started. At the same
time, China stocks rose after the country's export growth
unexpectedly accelerated in April.
Today's focus is on U.S. monthly non-farm payroll report for
further clues on the labour market and potentially the U.S. Fed
stance on monetary policy.