U.S. Jobs Report Powers European Markets Rally

Bridgette Randall
02 Sep, 2022
Frankfurt

European markets traded higher after the release of the U.S. payrolls report. 

In choppy trading on Friday, benchmark indexes in the region accelerated gains after the U.S. reported a slowdown in payrolls additions. 

Employers, corporations and governments at all levels, added 315,000 net new jobs in August, slower than the revised 526,000 increase in July. 

The job growth was slowed but still solid and the gains were across many sectors in the economy, bolstering the case that the next U.S. rate hike may be moderate 50 basis points and not large 75 basis points as many had anticipated. 

Average hourly wages rose 0.3% on a monthly basis and jobless rate jumped to 3.7% after more people returned to the job market, lifting the labor participation rate to 62.4% from 62.1% in July. 

The softer but solid jobs data lifted market indexes in New York and powered the rally in Europe. 

The DAX index increased 2.5% to 12,955.28, the CAC-40 index advanced 1.7% to 6,135.97, and the FTSE 100 index added 1.7% to 7,271.26. 

Producer prices, a measure of wholesale prices, in the euro zone rose 4% in July from the previous month, the eurostat report showed on Friday. 

The 4-month high increase was driven by the 9% surge in energy prices compared to 3% increase in June.  

On Thursday, Swiss Federal Statistics Office reported consumer price inflation index increased 3.5% from a year ago in August. 

The prices rose at a faster pace from 3.4% in July and accelerated to a 29-year high. 

On a monthly basis, prices rose 0.3% in August after staying flat in July.  

In stock trading, energy stocks led the gainers followed advances in technology stocks and banks. 

Deutsche Lufthansa gained 3.3% to 5.96 euros despite a one-day strike by pilots on Friday. 

GEA Group increased 1.9% to 32.95 euros and the food and beverage company said it is planning to invest 70 million euros in Germany to build a pharmaceutical technology center. 

Air Liquide increased 1.1% to 123.92 euros after the company confirmed its plan to exit from Russia. 

Ashmore Group fell as much as 4% but closed up 8.8% to 210.80 pence after the U.K.-based asset manager reported a decline in fiscal 2022 earnings. 

Asian markets marginally lower ahead of the U.S. jobs report as more cities tighten restrictions to prevent coronavirus outbreak from spreading. 

Shanghai index increased fractionally and indexes in Japan and India declined marginally after volatile trading.