Europe midday: Stocks rise before US non-farm payrolls

European stocks rose on Friday before the all-important US non-farm payrolls report.

Germany’s DAX edged up 0.90%, France’s CAC 40 increased 0.69%, Italy’s FTSE MIB jumped 2.21% and Spain’s IBEX 35 gained 2.20% at 1130 BST.

Oil prices were also higher with Brent crude up 0.60% to $46.68 per barrel and West Texas Intermediate up 0.57% to $45.40 per barrel at 1142 BST.

The Labor Department’s non-farm payrolls report at 1330 BST is expected to reveal US employers added 180,000 jobs in June, compared to just 38,000 in May.

The Federal Reserve is watching the labour market closely in determining when to raise interest rates. The Fed said a weak May jobs report played a part in its decision to keep rates unchanged in June.

“Last month's US payroll data changed the landscape for the markets and for the Fed,” said Naeen Aslam, chief market analyst at Think Market UK.

“As a result, investors scaled back on their bullish dollar bets because they could not see the Fed increasing the interest rate anytime soon.”

In eurozone data, Germany’s trade surplus shrank in May as exports declined unexpectedly, the Federal Statistical Office revealed The seasonally-adjusted trade surplus narrowed to €22.2bn in May from €24.1bn in April, according to Destatis, slightly below forecasts of €23bn. Exports fell 1.8% in May while imports rose 0.1%.

In the UK, the GfK’s post-Brexit consumer confidence index contracted further to -9 from -1 in June, marking the sharpest drop since December 1994 and the lowest level since December 2013.

“The post Brexit vote plunge in consumer confidence reported by GfK reinforces concern that consumers are likely to markedly rein in their spending over the coming months,” said Howard Archer, chief UK and European economist at IHS Global Insight.

“This would be especially damaging to growth UK prospects given the key role that the consumer has played.”

Meanwhile, official data showed the UK's total trade deficit in goods and services widened to £2.3bn in May but was not as bad as the £3.6bn feared by economists, as exports fell 4.4% month-on-month and imports were down 3.5%.

On the corporate front, shares in banks and real-estate investment trusts rallied after being pummelled throughout the week. Worries that low interest rates will squeeze profit margins have hurt banking shares this week while real-estate stocks were affected after trading in a number of UK commercial-property funds were suspended.

Germany’s Deutsche Bank was among the risers in banks along with Italy’s Banca Monte dei Paschi di Siena SpA which said it was working with European banking authorities to reduce its bad loans.

Among real estate shares, Hammerson and Land Securities were in the black.

Elsewhere, TDC A/S advanced following a report that US private-equity firm Apollo Global Management LLC is considering a bid for the Danish telecommunications group.