European stocks recovered before US jobs data

European stocks were almost unchanged yesterday as the Stoxx 600 index would probably continue its biggest weekly advance in two months. Future contracts indicate a strong session of positive numbers. Investors wait on data on the American labor market which would be a strong indicator of whether economy is on a strong pattern. For the Federal Bank this is the most important data of the week as Fed officials have stated numbers are crucial for stimulus tapering decision.

The Stoxx 600 dropped less than 0.1% at 8:08 a.m. in London. The benchmark index yesterday jumped 2.3% as the European Central Bank and the Bank of England said they will keep interest rates low. The benchmark index is heading for a 2.4% increase this week. Standard & Poor’s 500 Index futures added 1% today, as did the MSCI Asia Pacific Index.

Economist surveyed by Bloomberg have issued their predictions on upcoming US employment data. It will probably show that employers added 165 000 jobs in June and the unemployment rate fell to 7.5%, which the lowest level since 2008. As said before, sustained improvement in the labor market may influence how quickly the Federal Reserve reduces its $85 billion monthly purchases.

In Europe, investors attention is focused on German factory orders data, being the largest economy of the continent. A report at noon Frankfurt time may show orders increased 1.2% in May, after dropping 2.3% in the previous month, economists forecast.

Heineken fell 1% to 50.22 euros after JP Morgan Chase downgraded the stock to “underweight”, a rating similar to “sell”, from “neutral”.

Seadrill, the offshore driller, soared 0.9%. Bank of America’s Merrill Lynch unit upgraded its rating on the stock to “buy” from “hold”, supported by the company’s high dividend yield and drilling-fleet expansion.

Right after the opening of European markets UKs FTSE 100 and German DAX index recorded gains of 0.3%.