Investing.com – European stocks edged higher on Friday, boosted by unexpectedly positive Chinese manufacturing activity data, but trading ranges are likely to be limited as investors await the highly anticipated U.S. nonfarm payrolls report.
As of 3:40 a.m. ET (7:40 a.m. GMT), Germany's DAX index was up 0.1%, Britain's FTSE 100 was up 0.3% and France's CAC 40 was up 0.1%.
August was a tough month for European investors, with the pan-European Stoxx 600 index falling 2.6%, but the new month started on a more positive note, helped by a pleasant surprise from China.
China manufacturing activity rises in August – survey
A private survey released early on Friday showed factory activity in China, the world's second-largest economy and a key export market for major European companies, unexpectedly rose in August.
That's raising optimism that Asia's largest economy's slow post-COVID economic recovery is gaining pace, but it must be tempered by the still-tough situation in China's key property sector.
Additionally, the People's Bank of China said on Friday it would reduce the amount of foreign currency banks are required to hold to aid the country's economic recovery.
Final Eurozone manufacturing PMI data due for release
Many euro zone countries are due to release their manufacturing PMIs later on Friday, which will provide a final picture for the euro zone as a whole.
Manufacturing activity slowed at its fastest pace since the pandemic began last month, but August figures are expected to show a slight improvement.
European Central Bank President Christine Lagarde signalled a pause in the central bank's interest rate hiking cycle later this month, while data released on Thursday showed euro zone inflation remained steady at 5.3% in August, defying expectations it would fall to 5.1% as energy costs surged during the month.
Nonfarm payrolls also attracting attention
However, the most eagerly awaited economic data of the day will be the August nonfarm payrolls figures, which will be released overseas.
Analysts estimate the U.S. economy added 170,000 jobs last month, down from 187,000 the previous month, and the unemployment rate is expected to remain at 3.5%.
Signs of strength in the labor market would give the Fed more impetus and space to continue raising interest rates.
Allvis plunges after downward revision of full-year profits
With quarterly earnings season fast drawing to a close, shares in Aurubis (ETR: NAFG), Europe's largest copper producer, fell 15% after the company said it would miss its full-year profit guidance after discovering a “significant discrepancy” in its target inventory.
Oil prices rise as OPEC+ expects production cuts to be extended
Oil prices edged up on Friday and are on track to record a bigger weekly gain on optimism that a group of major oil producers will extend production cuts through the end of the year.
Russian Deputy Prime Minister Alexander Novak said on Thursday that Moscow had reached a new agreement with members of the Organization of the Petroleum Exporting Countries (OPEC) and their allies, OPEC+, on further supply cuts and was due to announce further production cuts next week.
The cuts are likely to add to ongoing supply cuts by Russia and Saudi Arabia, further tightening the supply outlook for the rest of the year.
By 3:40 a.m. ET, U.S. crude oil futures were trading up 0.4% at $84.00 a barrel, while Brent crude futures were up 0.4% at $87.17.
Both futures rose more than 3% this week, snapping a two-week slide, with U.S. futures in particular benefiting from a larger-than-expected drawdown in U.S. inventories.
Additionally, gold futures rose 0.2% to $1,969.65 per ounce, while EUR/USD rose 0.2% to 1.0858.
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