Europe shares retreat ahead of US jobs data

Europe shares are expected to open lower on Friday ahead of U.S. nonfarm payrolls data.

European markets are expected to retreat from a rally in European and global markets on Thursday despite better-than-expected U.S. jobless claims published on Thursday, indicating continued acceleration in the U.S. economy.

On Friday, investors will closely watch nonfarm payrolls data for December, due at 13:30 p.m. GMT, which is expected to show broad-based job growth. Economists expect a consensus of 240,000 nonfarm payrolls, while the unemployment rate is expected to fall to 5.7 percent, from 5.8 percent.

Expectations that the European Central Bank (ECB) could announce more aggressive stimulus measures – such as sovereign bond-buying – following dismal inflation data for the euro zone have also buoyed markets.

The inflation data, released Wednesday, showed that the 19-country bloc had fallen into deflation territory. ECB President Mario Draghi reiterated on Thursday that the central bank is considering quantitative easing prompting European shares to close sharply higher on Thursday. The bank’s next meeting is January 22.

In other news, the hunt for the two men suspected of carrying out the terrorist attack at the French satirical magazine Charlie Hebdo continues.

Armed and masked anti-terrorism police swooped on woodland villages northeast of Paris where the brothers are believed to be. Sources in the U.S. and Europe believe that one of the men trained with Al-Qaeda-affiliated militants in Yemen in 2011, Reuters reported.

Elsewhere, Indonesian search and rescue teams hunting for the wreck of an AirAsia plane have detected pings purportedly from the jet’s black box recorders, Santoso Sayogo, an investigator at the National Transportation Safety Committee, told Reuters early on Friday.

On the data front, euro area consumer confidence figures are due, as well as industrial production figures for Greece, the U.K., France, Germany and Spain. There are no major earnings.

 Varchev Traders

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