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European stocks traded mostly in the red zone, as investors await US labor market data, which may affect the likelihood and timing of the Fed interest rates hike. Meanwhile, the British markets approaching all-time highs, receiving support from a renewed collapse of the pound.
According to analysts, today's NFP may provide additional arguments in favor of raising rates. According to the futures market, the likelihood of a Fed hike in December is 63.4% versus 59.8% the previous day. The median forecast for payrolls report is 175 thousand vs 151 thousand prior .. add the average value of the index over the past 12 months amounted to 204 ths.,
If the Fed will take such a step, the ECB may find itself in an even more precarious position. Earlier it was reported that the ECB may begin to gradually reduce the amount QE as the end date draws nearer (March 2017).
"There is a limit to what central banks can do to help the economy and the markets should start to take into account the growth in prices" - said Guillermo Samper expert at MPPM EK.
Little impact on markets had data for Germany and the UK. The Statistical Office Destatis reported that the volume of industrial production in Germany increased in August by 2.5 percent, after falling 1.5 percent in July (the index was not revised). Analysts, on average, had expected production to grow by only 0.8 percent. Last rate of increase was the fastest since January, when the volume of production increased by 2.8 percent. Excluding energy and construction, production increased by 3.3 percent compared to July.
Meanwhile, the Office for National Statistics reported that industrial production in the UK unexpectedly decreased in August, offsetting the previous two months of growth. The volume of industrial production fell by 0.4 percent on a monthly basis, which followed an increase of 0,1 percent in July and June. Economists had forecast that industrial production will increase again by 0.1 percent.
At the same time, the volume of production in the manufacturing industry rose by 0.2 percent after declined by 0.9 percent in July. Nevertheless, the pace of recent growth has been significantly lower than expected (+0.5 percent). The decline was seen in two of the four major sectors, led by mining and quarrying, where output fell by 3.7 per cent.
The composite index of the largest companies in the region Stoxx Europe 600 fell by 0.8 percent.
Creditors shares rises fot the fourth day, moving counter to the common market dynamics. Cost of Deutsche Bank AG rose 1.3 percent after people familiar with the matter, said that the bank holds informal talks with firms involved in securities, to explore various options, including raising capital.
Shares of mining companies rose after Bank of America analysts recommended buying shares of the sector.
Capitalization of Delta Lloyd NV increased by 2.1 per cent following the rejection of an unsolicited offer from the NN Group NV, referring to the very low valuation. It is worth emphasizing, NN Group NV offered 2.4 bln. Euro.
The cost of EON rose 2.4 percent after reports that Cevian Capital AB is considering the purchase of 10 percent stake in the German company.
At the moment:
FTSE 100 +75.06 7075.02 + 1.07%
DAX -59.93 10508.87 -0.57%
CAC 40 4457.85 -22.25 -0.50%
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