European Stock Futures Higher; Caution Ahead of Payrolls, Omicron News By

© Reuters.

By Peter Nurse 

- European stock markets are expected to edge higher at the open Friday, helped by the sharp rebound on Wall Street as investors wait for more news about the omicron Covid variant ahead of the release of important U.S. employment data.

At 2:20 AM ET (0720 GMT), the DAX futures contract in Germany traded 0.4% higher, CAC 40 futures in France climbed 0.7% and the FTSE 100 futures contract in the U.K. rose 0.4%.

Equity markets around the world have seen volatile trading for much of this week amid uncertainty over the economic impact of the recently discovered omicron Covid variant. 

Helping the tone in Europe Friday was the significant bounce on Wall Street overnight, with the blue chip Dow Jones Industrial Average surging over 600 points, or 1.8%.

However, any gains are likely to be tempered with caution after Australia became the the latest country on Friday to report an omicron case, suggesting the travel restrictions put in place to combat its spread are having little impact.

The European Union's public health agency said on Thursday that omicron could account for more than half of all infections in Europe within months, while Germany, Europe's biggest economy, said it would only allow those with proof of vaccination or naturally-acquired immunity into shops and restaurants. It will also make vaccination mandatory for those in the health and care systems from March.

The scheduled release of the official U.S. monthly jobs report later Friday is also likely to prompt vigilance, with markets looking for clues as to whether the Federal Reserve will increase the pace of its tapering in December.

Nonfarm payrolls are expected to have increased by 560,000 in November, at 8:30 AM ET (1230 GMT), with the unemployment rate expected to drop to 4.4%.  

In corporate news, the tech sector is likely to be in focus after the news that Didi Global (NYSE:DIDI) will delist from the New York stock exchange and pursue a listing in Hong Kong, just a few months after its $4.4 billion U.S. IPO, while Southeast Asian super-app Grab fell 21% on its debut after merging with a special purpose acquisition company.

Crude prices rose Friday after OPEC+ left the possibility open of a quick change in policy if fuel demand is badly hit by the travel restrictions and lockdowns put in place to combat the omicron Covid variant. 

The Organization of Petroleum Exporting Countries and its allies, a group known as OPEC+, surprised the market by sticking with the plans to add 400,000 barrels per day of supply in January, but the top producers also said they could meet again before their next scheduled meeting on Jan. 4, if needed.

By 2 AM ET, U.S. crude futures traded 1.7% higher at $67.62 a barrel, while the Brent contract rose 1.6% to $70.81. Both contracts are on course for a losing week, for the sixth straight week.

Additionally, gold futures rose 0.6% to $1,772.90/oz, while EUR/USD traded 0.1% lower at 1.1284.

 

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