European Markets Jumped After Solid U.S. Jobs Report

(RTTNews) - The European markets maintained slight gains in early trade Friday, ahead of the highly anticipated U.S. jobs report for July. The markets broke out higher after the report showed another strong increased in U.S. employment growth. The massive stimulus package announced by the Bank of England yesterday also contributed to the positive mood among investors.

For the second consecutive month, the Labor Department released a report showing much stronger than expected U.S. monthly job growth. The report released by the Labor Department on Friday showed that non-farm payroll employment surged up by 255,000 jobs in July after jumping by an upwardly revised 292,000 jobs in June.

Employment had been expected to increase by about 185,000 jobs compared to the addition of 287,000 jobs originally reported for the previous month.

Even with the stronger than expected job growth, the unemployment rate held at 4.9 percent in July. The unemployment rate had been expected to edge down to 4.8 percent.

The massive stimulus package announced on Thursday was appropriate to deal with the high uncertainty caused by "Brexit", Bank of England Governor Mark Carney said.

In an interview to the LBC Radio, Carney said, "It's not radical, it's appropriate for the situation we're in right now which is there is more uncertainty because of the decision to leave the European Union."

The central bank slashed its key interest rate by a quarter-point to 0.25 percent, the first in seven years. The bank also announced a Term Lending Scheme and corporate bond purchases, and increased the size of its asset purchases.

Carney said on Thursday that the Bank of England cannot fully offset the negative shock to the economy from "Brexit".

Citing a period of big adjustment ahead, Carney said, "So we're providing the stimulus the economy needs today for the future."

The pan-European Stoxx Europe 600 index advanced 0.99 percent. The Euro Stoxx 50 index of eurozone bluechip stocks increased 1.41 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.79 percent.

The DAX of Germany climbed 1.36 percent and the CAC 40 of France rose 1.49 percent. The FTSE 100 of the U.K. gained 0.79 percent and the SMI of Switzerland finished higher by 1.40 percent.

In Frankfurt, fashion retailer Hugo Boss soared 6.99 percent after its second-quarter sales beat estimates.

Airline Air Berlin jumped 2.76 percent after showing improvement in its capacity utilization rate for the vacation month of July.

Insurance giant Allianz tumbled 1.60 percent as its second-quarter profit almost halved, hurt by claims from natural catastrophes in the property and casualty segment.

In Paris, LafargeHolcim leaped 5.42 percent. The building materials giant reaffirmed its guidance after delivering better-than-expected operating profit in its second quarter.

In London, Bellway surged 5.03 percent. The homebuilder has delivered an outstanding trading performance for the year ended 31 July 2016 and said it is still too early to assess the effect of the EU referendum result.

Royal Bank of Scotland Group fell 7.19 percent after reporting a wider loss for the first half of the year, blaming on "legacy issues."

Novo Nordisk sank10.08 percent in Copenhagen, after the pharmaceutical company slashed its sales and profit forecasts for the year, citing a difficult U.S. market.

Investment bank Mediobanca climbed 8.75 percent in Milan after reporting a rise in fiscal fourth-quarter profit amid lower provisions for bad loans.

Germany's factory orders declined unexpectedly in June on weak foreign demand especially from the euro area, official data revealed Friday.

Factory orders fell 0.4 percent in June from May, in contrast to a revised 0.1 percent rise a month ago, Destatis said. Economists had forecast a 0.5 percent rise for June after staying flat in May, as initially estimated.

France's trade deficit in June widened from a year earlier, figures from the French Customs showed Friday. The trade deficit rose to EUR 3.44 billion from EUR 2.60 billion in the same month last year. Economists had forecast a EUR 3.9 billion shortfall.

The French current account deficit widened on rising visible trade shortfall in June, the Bank of France said Friday. The current account shortfall doubled to EUR 0.6 billion in June from EUR 0.3 billion in May.

British house price inflation remained unchanged at a 12-month low in the three months to July, while they declined from the previous month, survey figures from the Lloyds Banking Group subsidiary Halifax showed Friday.

The Halifax house price index rose 8.4 percent year-on-year in the three months to July, same as in the June quarter, and the lowest since July 2015. Economists had expected an acceleration to 8.8 percent.

With the value of imports increasing by much more than the value of exports, the Commerce Department released a report on Friday showing that the U.S. trade deficit widened by more than anticipated in the month of June.

The report said the trade deficit widened to $44.5 billion in June from a revised $41.0 billion in May. The deficit had been expected to widen to $43.0 billion from the $41.1 billion originally reported for the previous month.