Europe open: Shares edge higher ahead of US payrolls; Travel stocks lower

by | Jun 4, 2021

European shares edged ahead on Friday as investors awaited crucial US jobs data later in the day.
The pan-European Stoxx 600 index was up 0.21% with all major regional bourses higher. Traders were eying US May payrolls data at 1330 BST with investors concerned that a strong figure would heighten worries about the Federal Reserve cutting back its stimulus programme.

Unemployment rate data and average earnings are also due.

“The welcome return to economic growth continues to be tempered by fears of rising prices, as elements of supply and demand remain out of kilter,” said Richard Hunter, head of markets at Interactive Investor.

“Such inflationary concerns will be revisited after the release of the non-farm payrolls release later today. There is a clear consensus that the reading will be significantly higher than last month’s unexpectedly low number of 266,000, but there is also a particularly wide spread on what the figure might be, ranging from 650,000 to 750,000.

“A particularly strong reading would reignite the debate on monetary policy. While the Federal Reserve continues to maintain its view of inflation as a passing phase, there are nonetheless suspicions that the voices for the tapering of quantitative easing – if not interest rates – are becoming louder.”

In equity news, travel stocks fell after the UK government did not add any countries to its ‘safe’ green list on Thursday and Portugal was moved from green to amber – prompting a scramble for tourists to return home.

British Airways owner IAG, engine maker Rolls-Royce and budget airlines, Ryanair, easyJet and Wizz Air all fell on the news as Britain added seven countries, including Egypt and Sri Lanka, to its “red list” of destinations that require hotel quarantine on return to England.

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