Investors digest ECB stimulus, await US jobs report

European markets are expected to open higher on Friday as investors digest an expansion of the European Central Bank’s bond-buying program and await the U.S. nonfarm payrolls report due later in the day.

Britain’s FTSE 100 is seen around 52 points higher at 6,394, Germany’s DAX is expected to open around 145 points higher at 12,576 and France’s CAC 40 is set to climb around 49 points to 5,061, according to IG data.

The ECB on Thursday announced a 600 billion euro ($672 billion) expansion of its Pandemic Emergency Purchase Programme (PEPP), a larger increase than analysts had been expecting. 

The new injection brings the central bank’s total bond buying to 1.35 trillion euros as it looks to weather what ECB President Christine Lagarde called an “unprecedented contraction” in the euro zone economy.

Stocks in Asia Pacific were mostly higher during Friday afternoon trade, led by a 1.24% gain for South Korea’s Kospi.

The week’s global market rally hit pause on Thursday but looks set to resume on Friday as the reopening of economies and substantial fiscal and monetary stimulus measures continue to drive risk-on sentiment.

Investors will have an eye on a key monthly jobs report out of the U.S. expected at 8:30 a.m. ET on Friday. On Thursday, the Labor Department said 1.877 million Americans filed for unemployment benefits last week, higher than a Dow Jones estimate of 1.775 million.

Markets are also monitoring progress on Covid-19 vaccines as economies look to reopen following months of lockdowns necessitated by the pandemic. British drugmaker AstraZeneca has doubled its manufacturing capabilities for a potential vaccine to 2 billion doses with distribution expected to begin this fall.

A survey out of the U.K. on Friday showed consumer confidence in late May falling to its lowest level since the global financial crisis, while retail sales plummeted 18% across the month.

German factory orders fell 25.8% in May, according to figures released Friday morning, a more drastic contraction than analysts expected as Europe’s largest economy continued to be hammered by industrial shutdowns as a result of the pandemic.

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