Stocks Climb as Calm Prevails Before Payrolls - Europe Market Wrap

Stocks advanced and sovereign bonds were broadly firmer as markets settled following a volatile week in yields. 3%, while Treasuries gained across maturities and the Dollar ended a four-day run of advances. French government bonds remained under pressure as concerns over the country’s political gridlock and missed deficit targets persisted, while German 10-year yields reached their highest level since 2011. Expectations for US rate hikes also eased, with traders reducing bets on the number of increases over the next 12 months.

Brent crude fell toward $100 a barrel as European countries were reported to be discussing a release of strategic reserves. Oil prices remained an important driver for inflation expectations, while broader risk sentiment steadied ahead of the US payrolls report. The US jobs report is expected to show nonfarm payrolls rising by around 90,000 in September after a stronger increase in August. Resilient economic data has supported risk assets while also giving the Fed more room to maintain a restrictive policy stance if inflation remains elevated.

Elsewhere, Euro-area inflation accelerated to a three-year high, though European markets largely shrugged off the data. The Stoxx 600 was still heading for a weekly decline, while regional bonds gained and the Euro was little changed.