European Shares Set To Rise As US Senate Passes Debt Ceiling Bill

European Shares Set To Rise As US Senate Passes Debt Ceiling Bill

June 8, 2023

European stocks are likely to open higher on Friday after the U.S. Senate approved a bipartisan deal to address the debt ceiling and implement budget cuts, avoiding a potential U.S. default.

Hopes of a pause in the U.S. central bank’s policy may also boost sentiment after Philadelphia Federal Reserve President Patrick Harker said the Fed should probably skip raising interest rate at its next policy meeting.

Asian markets followed Wall Street higher on optimism over China’s recovery and Fed pause hopes.

Focus now shifts to the monthly U.S. jobs report due later in the day, which could impact the outlook for interest rates.

Economists expect employment to increase by 190,000 jobs in May after an increase of 253,000 jobs in April. The unemployment rate is expected to inch up to 3.5 percent from 3.4 percent.

The dollar sagged while gold edged up and was on track for its biggest weekly gain in nearly two months.

Oil extended overnight gains, heading into the June 4 OPEC+ policy meeting.

U.S. stocks rose overnight amid signs of progress on the U.S. debt ceiling bill and receding bets for a rate hike by the U.S. Federal Reserve this month.

The tech-heavy Nasdaq Composite surged 1.3 percent and the S&P 500 added 1 percent to reach their best closing levels in over nine months while the Dow gained half a percent.

In economic releases, manufacturing contracted for a seventh straight month in May and jobless claims increased less than expected last week while private sector employment rose more than expected in May, separate reports showed.

European stocks ended on a buoyant note Thursday after data showed Eurozone inflation fell more than expected to 6.1 percent in May.

The pan European STOXX 600 advanced 0.8 percent. The German DAX rallied 1.2 percent, while France’s CAC 40 and the U.K.’s FTSE 100 both rose about 0.6 percent.

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