Europe midday: Stocks jump ahead of US jobs report, central banks in focus

Stocks across the Continent are moving higher, tracking gains overnight on Wall Street, with investors apparently cheered by the prospect of central bank easing on both sides of the Atlantic should trade tensions increase.

As of 1255 BST, the benchmark Stoxx 600 was up by 0.82% at 377.06, alongside a jump of 1.45% to 5,355.13 for the Cac-40, while the FTSE Mibtel was adding 1.0% to 20,378.90.

For later in the day, investors were waiting on US non-farm payrolls figures referencing the month of May which were scheduled for release at 1330 BST.

Euro/dollar had drifted 0.1% lower to 1.12625 ahead of the US jobs report.

"European markets are in the green today, as the bullish sentiment that has permeated equity markets continues to hold. With the Dow heading for its best week of the year, there has been a clear shift, specifically centred around the possibility of multiple Fed rate cuts," said IG's Josh Mahony.

In recent weeks, interest rate futures had moved to price-in as many three interest rate hikes Stateside before the end of the year, with various speeches from top Federal Reserve officials over just the past week having indicated that at least some easing might be on the cards.

And on Friday morning, China's central bank joined in, with People's Bank of China Governor Yi Gang telling Bloomberg that there was "tremendous" room to adjust monetary policy.

Brent crude oil futures were also edging higher in the background, with the front month contract adding 0.92% to $62.24 a barrel on the ICE after Russia signalled that it would support an extension of oil output curbs alongside other producers from the Organisation of Petroleum Exporting Countries.

Yet on the economic front, investors were digesting more weak data out of Germany.

According to the Federal Office of Statistics, German industrial production slumped by 1.9% in April (consensus: -0.4%) when compared to the month before and was 1.8% lower year-on-year, led a by 3.3% month-on-month drop in orders for capital goods.

Claus Vistesen at Pantheon Macroeconomics said a setback had been expected given the "strong" output seen over the first quarter.

But Vistesen added: "It is too soon to say anything conclusive about the second quarter as a whole, but we fear that production will fall outright on the quarter, dragging GDP growth down after an otherwise solid start of the year."

In other German news, in a biannual report, the Bundesbank slashed its forecast for economic growth in 2019 to 0.6%, forecasting a downturn in factory production on the back of lower exports.

Its new projection was down from the 1.6% pace of expansion of which it had predicted in December.

Germany's central bank expected a moderate rebound in GDP growth in 2020 to reach 1.2%, but lowered its forecast for CPI inflation next year from 1.8% to 1.5%.

A trading halt was imposed on shares of Mediaset's Spanish-listed subsidiary after speculation that its parent company was looking at how to integrate further sent them soaring.

Mediaset reportedly denied having any plans that might result bid for full control of the unit.

Sanofi's shares were also sharply higher after the French drug giant managed to pinch rival Novartis executive Paul Hudson as its new chief.