Europe Factors to Watch-Shares set to halt rally; U.S. jobs eyed
PARIS, Sept 5 (Reuters) - European stocks were set to dip on Friday morning, pausing after the previous session's sharp rally spurred by a surprise interest rate cut by the European Central Bank which also launched new measures to support the euro zone economy. At 0614 GMT, futures for Euro STOXX 50, for UK's FTSE 100, for Germany's DAX and for France's CAC were down 0.1-0.4 percent. On Thursday, the ECB cut its main refinancing rate to 0.05 percent from 0.15 percent and drove the overnight deposit rate deeper into negative territory, now charging banks 0.20 percent to park funds with the central bank. ECB President Mario Draghi also announced plans for an asset-backed securities (ABS) and covered bond purchase programme to help ease credit conditions in the bloc. Sources told Reuters it could amount to 500 billion euros ($650 billion) over three years. The ECB's latest moves sparked a strong rally in European stocks, with the FTSEurofirst 300 index adding 1.1 percent to reach its highest level since 2008. Southern European markets gained the most, with Italy's MIB surging 2.8 percent. Jonathan Stubbs, equity strategist at Citi, saw further gains in European stocks in the coming months. "European equities have returned 8 percent so far this year, recovering strongly from the recent summer sell-off as bad news - weaker macro data - has quickly become good news - more ECB liquidity," he wrote in a note. "There has been a strong re-rating since mid-2012. European equities now 17 times P/E, from 10 times then. No longer cheap in absolute terms, but still super cheap relative to other asset classes, such as credit." On Friday, investors awaited U.S. monthly payrolls data, seeking insight on the outlook for U.S. interest rates. The U.S. Labor Department is expected to report that non-farm payrolls rose to 225,000 in August, after rising 209,000 in July. The unemployment rate is expected to slip to 6.1 percent from 6.2 percent. Europe bourses in 2014: (link.reuters.com/pad95v) Asset performance in 2014: (link.reuters.com/rav46v) ------------------------------------------------------------------------------ MARKET SNAPSHOT AT 0616 GMT: LAST PCT CHG NET CHG S&P 500 1,997.65 -0.15 % -3.07 NIKKEI 15668.68 -0.05 % -7.5 MSCI ASIA EX-JP 512.27 -0.61 % -3.14 EUR/USD 1.2939 -0.04 % -0.0005 USD/JPY 105.30 0.04 % 0.0400 10-YR US TSY YLD 2.450 -- 0.00 10-YR BUND YLD 0.971 -- 0.01 SPOT GOLD $1,264.30 0.27 % $3.46 US CRUDE $94.55 0.11 % 0.10 > GLOBAL MARKETS-EURO UNDER WATER AS ECB OPENS LIQUIDITY SPOUT > US STOCKS-WALL ST ENDS DOWN AS ENERGY SHARES DECLINE, OFFSET ECB > NIKKEI SNAPS 3-DAY WINNING STREAK ON PROFIT-TAKING AFTER BOJ OUTCOME > EURO WOBBLY AFTER ECB'S STIMULUS JOLT; DOLLAR HITS 6-YEAR HIGH VS YEN > GOLD DIPS TO NEAR 3-MONTH LOW ON DOLLAR STRENGTH; U.S. DATA EYED > COPPER CLIMBS AS ECB RATE CUT SUPPORTS METALS > BRENT STAYS BELOW $102, HEADS FOR WEEKLY DROP AS FIRM DOLLAR HURTS COMPANY NEWS: BP A U.S. judge has decided that BP Plc was 'grossly negligent' and 'reckless' in the Gulf of Mexico oil spill four years ago, a ruling that could add nearly $18 billion in fines to more than $42 billion in charges the company took for the worst offshore environmental disaster in U.S. history. BANKS Thirteen of the world's biggest banks, including UBS, Credit Suisse, Barclays, Deutsche Bank and BNP Paribas have been accused by an Alaska pension fund of breaking U.S. antitrust and commodities laws by rigging an interest rate benchmark used to price many financial instruments in the $710 trillion derivatives market. In a complaint filed on Thursday in U.S. District Court in Manhattan, the Alaska Electrical Pension Fund said the banks ran a "secret conspiracy" to set the "ISDAfix" rate at artificial levels from 2009 to 2012, causing billions of dollars of investor losses. AIR FRANCE Air France-KLM announced plans to speed up the development of its low-cost unit and cut back freighter operations in its latest efforts to boost competitiveness. LUFTHANSA The airline said it would cancel over 200 flights on Friday evening due to a six-hour strike announced by pilots' union VC that affects short-haul Lufthansa flights leaving Frankfurt airport. EURONEXT The exchange said it aimed to decide in the next two months whether to add new quality terms to its milling wheat futures contract 0#BL2:, in line with rules set by silos to ensure delivery of suitable wheat out of a poor French crop. KLOECKNER The German steel trader sees growth of more than 2 percent in the European steel industry next year, its chief executive told Sueddeutsche Zeitung. ABENGOA Abengoa shareholder FR Alfajor Holdings, a company that groups stock owned by U.S. private equity firm First Reserve Corp., is placing about 4.25 percent of the Spanish renewable energy firm in the market. The placement should be finalised on Friday. SMITH & NEPHEW London-based medical device maker Smith & Nephew PLC has agreed to pay $11.3 million to settle allegations that it sold the U.S. government devices it claimed were U.S.-made but actually came from Malaysia. FOXTONS As many as 20.5 million shares, or 7.3 percent of Foxtons, are being offered in an accelerated bookbuild by Credit Suisse and Numis, Bloomberg News reported, citing a person familiar with the sale. ATLAS MARA /BOB DIAMOND Atlas Mara, the African investment vehicle of former Barclays boss Bob Diamond, is in talks to buy a $275 million stake in Union Bank of Nigeria , a person familiar with the matter said on Thursday. (Reporting by Blaise Robinson; Editing by Sudip Kar-Gupta)
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