European equity markets inched up as investors awaited Friday’s U.S. payrolls report, which could influence the Federal Reserve’s upcoming interest rate decisions.
By 08:04 GMT, the pan-European Stoxx 600 had gained 0.3%, positioning it for a modest weekly advance. Germany’s DAX rose 0.1%, France’s CAC 40 also increased by 0.1%, and the U.K.’s FTSE 100 added 0.2%.
Economists predict the U.S. Labor Department’s Bureau of Labor Statistics will report 75,000 new jobs in August, slightly above July’s 73,000. Analysts suggest that a softer-than-expected reading could reinforce expectations of a 25-basis-point rate cut at the Fed’s September 16-17 meeting. CME’s FedWatch Tool indicates nearly a 100% probability of such a reduction, lowering the target range from 4.25%-4.5%.
Fed officials face the dual challenge of maintaining price stability while promoting maximum employment. Recent commentary suggests that supporting the labor market may currently take priority. Lowering interest rates can stimulate business and consumer spending but carries the risk of reigniting inflationary pressures.
Earlier labor data this week also hinted at a slowing U.S. job market. Private-sector hiring decelerated in August, while weekly unemployment claims rose more than expected, pointing to a potential cooling in employment growth.
In company news, Hexagon (TG:HXG) shares jumped following the announcement of a $3.16 billion sale of its design and engineering division to U.S. firm Cadence Design, expected to close in Q1 next year. Conversely, Orsted (TG:D2G) shares fell after the Danish energy company lowered its operating outlook due to weaker-than-expected wind speeds. Temenos also declined following the immediate departure of CEO Jean-Pierre Brulard.
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