European shares climbed on Thursday, extending gains from the previous session amid growing expectations of further U.S. Federal Reserve monetary easing.
At 07:05 GMT, Germany’s DAX advanced 0.5%, France’s CAC 40 added 0.9%, and the U.K.’s FTSE 100 rose 0.2%.
Market Expectations for Fed Action
The three major European indices posted roughly 1% gains on Wednesday, ahead of a positive close on Wall Street. Investor sentiment was boosted by a weaker-than-expected ADP employment report, which reinforced expectations of quarter-point rate cuts at the remaining Federal Reserve policy meetings this year.
In the U.S., much of the government shut down Wednesday after an eleventh-hour Republican-backed spending bill failed to pass the Senate. This pause in operations will halt the release of official data for the immediate term, including Friday’s closely watched nonfarm payrolls report, focusing attention on the weak ADP numbers.
Eurozone Economic Data
Later in the session, a series of central bankers, including ECB Vice-President Luis De Guindos and ECB board member Patrick Montagner, are scheduled to speak at various forums. The eurozone unemployment rate for August is also due, expected to remain steady at 6.2%. Recent data showed eurozone inflation rising to 2.2% in September from 2.0% in August, supporting the European Central Bank’s decision to hold rates for a third consecutive meeting on 30 October.
Corporate News
Renault (EU:RNO) drew attention after Bloomberg reported discussions with China’s Chery Automobile regarding a potential partnership in South America. The talks reportedly cover Colombia and Argentina, where Chery could access Renault’s factories in exchange for capital investment and product design support.
Oil Markets
Oil prices edged higher Thursday, rebounding from near four-month lows amid renewed concerns over tighter sanctions on Russian crude. Brent futures rose 0.1% to $65.41 a barrel, while U.S. West Texas Intermediate crude advanced 0.1% to $61.83 a barrel. Both benchmarks had fallen about 1% in the previous session, with Brent closing at its lowest since 5 June and WTI since 30 May.
The Group of Seven finance ministers said Wednesday they will increase pressure on Russia by targeting those continuing to buy Russian oil and entities facilitating circumvention. Additionally, the Wall Street Journal reported that the U.S. plans to provide Ukraine with intelligence for long-range missile strikes on Russian energy infrastructure, aiming to reduce Kremlin revenue from oil sales.
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