Europe open: Stocks edge higher ahead of payrolls

European stocks edged higher on Friday, taking their cue from positive sessions in the US and Asia as investors looked to the release of the latest non-farm payrolls report.

At 0840 BST, the benchmark Stoxx Europe 600 index was up 0.5%, while Germany’s DAX and France’s CAC were 0.3% firmer.

At the same time, oil prices were holding fairly steady after Thursday’s meeting of the Organisation of the Petroleum Exporting Countries in Vienna failed to yield an agreement on an oil production ceiling. West Texas Intermediate was up 0.2% to $49.26 a barrel and Brent crude was 0.3% higher at $50.18.

Overall gains in equity markets were muted, however, as market participants awaited the non-farms for any further clues on the timing of the next rate hike by the Federal Reserve.

“In focus today will be - surprise, surprise - this afternoon’s US employment report given its significance within the wide spectrum of data that the US central bank - the Federal Reserve - monitors whilst debating the path for US monetary policy that ultimately has global market-moving ramifications,” said Mike van Dulken, head of research at Accendo Markets.

“And with rhetoric of late increasingly suggesting that a summer rate rise was a real possibility, any suggestion that the US jobs market is picking up steam more quickly than expected could well heighten expectations of the trigger being pulled again mid-month.”

Societe Generale said: “The recently settled strike at Verizon combined with a sharp cooling in the ‘management, technical consulting’ sector will likely put a dent in the headline payrolls gain in May.

“We expect an increase of 140k which, excluding the effect of the strike, would be a solid, if unspectacular, result. Meanwhile, earnings should post a decent 0.2% gain and the unemployment rate may have inched down from 5.0% to 4.9%.”

Consensus forecasts are for an increase of 164,000.

Investors will also eye Eurozone services PMI at 0900 BST and retail sales for the bloc at 1000 BST.

Corporate news was thin on the ground. AstraZeneca was in the black after announcing the completion of its licensing agreement with Ironwood Pharmaceuticals for the exclusive US rights to the drug.

French hotels group Accor was a high riser after Le Monde reported that China’s Jin Jiang was considering upping its stake to 29%.

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