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European markets little higher as US NFP demands caution

FXstreet.com (Barcelona) - While the German DAX 30, the French CAC 40 and the Italian FTSE MIB are up by 0.10%-0.20% after the European Commission economic growth forecast and ahead of the US nonfarm payrolls report, the Spanish IBEX 35 rises by 0.50% as Spain is likely to be given an extension to reduce its deficit until 2016 after a revision lower to its growth forecast and unable to meet the target. The British FTSE 100 is up by 0.06% after the UK Services PMI, up from 52.4 to 52.9 in April, instead of staying unchanged as expected.

The European Commission report suggests -0.4% and -0.1% of annual GDP change in the euro area and EU, respectively, but 2014 would allow growth by 1.2% and 1.4%, respectively. Olli Rehn, Commission Vice-President for Economic and Monetary Affairs and the Euro said: "In view of the protracted recession, we must do whatever it takes to overcome the unemployment crisis in Europe. The EU’s policy mix is focused on sustainable growth and job creation. Fiscal consolidation is continuing, but its pace is slowing down. In parallel, structural reforms must be intensified to unlock growth in Europe."

EMU PPI fell -0.2% as expected in March, but its YoY came in at 0.7% instead of 0.6% because data in the prior month was revised higher from 1.3% to 1.4%.

Futures for the American S&P 500, Nasdaq 100 and Dow Jones 30 are signaling a quite flat opening ahead of the New York session and the US Nonfarm Paryolls report. “Consensus forecasts at 145k drifted lower after the ADP report of 119k and our standing estimate of 162k looks admittedly toppish. Even if we are right, it would still represent a deceleration in job growth. The jobs number will be weaker than recent trends, even if odds favor a bounce higher in April”, wrote TD Securities analyst Alvin Pontoh, expecting the unemployment rate to remain unchanged at 7.6%, (7.57%) but the risk is tilted higher.

Forex Flash: Today's US NFP report may boost skepticism – TD Securities

TD Securities analysts consider today’s Nonfarm Payrolls data as very important jobs report since economic data has been slipping and in a recovery all about jobs another downside surprise (88k last month) would show further skepticism that last month was simply a one-off fluke. “Consensus forecasts at 145k drifted lower after the ADP report of 119k and our standing estimate of 162k looks admittedly toppish. Even if we are right, it would still represent a deceleration in job growth. The jobs number will be weaker than recent trends, even if odds favor a bounce higher in April”, wrote analyst Alvin Pontoh, expecting the unemployment rate to remain unchanged at 7.6%, (7.57%) but the risk is tilted higher.
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