Europe Factors to Watch-Shares set to halt rally; U.S. jobs eyed

Fri Sep 5, 2014 2:19am EDT

PARIS, Sept 5 (Reuters) - European stocks were set to dip on Friday morning,
pausing after the previous session's sharp rally spurred by a surprise interest
rate cut by the European Central Bank which also launched new measures to
support the euro zone economy.
    At 0614 GMT, futures for Euro STOXX 50, for UK's FTSE 100,
for Germany's DAX and for France's CAC were down 0.1-0.4
percent.
    On Thursday, the ECB cut its main refinancing rate to 0.05 percent from 0.15
percent and drove the overnight deposit rate deeper into negative territory, now
charging banks 0.20 percent to park funds with the central bank.
    ECB President Mario Draghi also announced plans for an asset-backed
securities (ABS) and covered bond purchase programme to help ease credit
conditions in the bloc. Sources told Reuters it could amount to 500 billion
euros ($650 billion) over three years. 
    The ECB's latest moves sparked a strong rally in European stocks, with the
FTSEurofirst 300 index adding 1.1 percent to reach its highest level
since 2008. Southern European markets gained the most, with Italy's MIB 
surging 2.8 percent.
    Jonathan Stubbs, equity strategist at Citi, saw further gains in European
stocks in the coming months.
    "European equities have returned 8 percent so far this year, recovering
strongly from the recent summer sell-off as bad news - weaker macro data - has
quickly become good news - more ECB liquidity," he wrote in a note.
    "There has been a strong re-rating since mid-2012. European equities now 17
times P/E, from 10 times then. No longer cheap in absolute terms, but still
super cheap relative to other asset classes, such as credit."
    On Friday, investors awaited U.S. monthly payrolls data, seeking insight on
the outlook for U.S. interest rates.
    The U.S. Labor Department is expected to report that non-farm payrolls rose
to 225,000 in August, after rising 209,000 in July. The unemployment rate is
expected to slip to 6.1 percent from 6.2 percent. 
   
    Europe bourses in 2014: (link.reuters.com/pad95v)
    Asset performance in 2014: (link.reuters.com/rav46v)
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  MARKET SNAPSHOT AT 0616 GMT: 
                                         LAST   PCT CHG  NET CHG
 S&P 500                             1,997.65   -0.15 %    -3.07
 NIKKEI                              15668.68   -0.05 %     -7.5
 MSCI ASIA EX-JP                       512.27   -0.61 %    -3.14
 EUR/USD                               1.2939   -0.04 %  -0.0005
 USD/JPY                               105.30    0.04 %   0.0400
 10-YR US TSY YLD                       2.450        --     0.00
 10-YR BUND YLD                         0.971        --     0.01
 SPOT GOLD                          $1,264.30    0.27 %    $3.46
 US CRUDE                              $94.55    0.11 %     0.10
    
  > GLOBAL MARKETS-EURO UNDER WATER AS ECB OPENS LIQUIDITY SPOUT 
  > US STOCKS-WALL ST ENDS DOWN AS ENERGY SHARES DECLINE, OFFSET ECB 
  > NIKKEI SNAPS 3-DAY WINNING STREAK ON PROFIT-TAKING AFTER BOJ OUTCOME 
  > EURO WOBBLY AFTER ECB'S STIMULUS JOLT; DOLLAR HITS 6-YEAR HIGH VS YEN 
  > GOLD DIPS TO NEAR 3-MONTH LOW ON DOLLAR STRENGTH; U.S. DATA EYED 
  > COPPER CLIMBS AS ECB RATE CUT SUPPORTS METALS 
  > BRENT STAYS BELOW $102, HEADS FOR WEEKLY DROP AS FIRM DOLLAR HURTS 
    
    COMPANY NEWS:    
    BP 
    A U.S. judge has decided that BP Plc was 'grossly negligent' and 'reckless'
in the Gulf of Mexico oil spill four years ago, a ruling that could add nearly
$18 billion in fines to more than $42 billion in charges the company took for
the worst offshore environmental disaster in U.S. history. 
    
    BANKS
    Thirteen of the world's biggest banks, including UBS, Credit
Suisse, Barclays, Deutsche Bank and BNP Paribas
 have been accused by an Alaska pension fund of breaking U.S. antitrust
and commodities laws by rigging an interest rate benchmark used to price many
financial instruments in the $710 trillion derivatives market.
    In a complaint filed on Thursday in U.S. District Court in Manhattan, the
Alaska Electrical Pension Fund said the banks ran a "secret conspiracy" to set
the "ISDAfix" rate at artificial levels from 2009 to 2012, causing billions of
dollars of investor losses. 
    
    AIR FRANCE 
    Air France-KLM announced plans to speed up the development of its low-cost
unit and cut back freighter operations in its latest efforts to boost
competitiveness. 
    
    LUFTHANSA 
    The airline said it would cancel over 200 flights on Friday evening due to a
six-hour strike announced by pilots' union VC that affects short-haul Lufthansa
flights leaving Frankfurt airport. 
    
    EURONEXT 
    The exchange said it aimed to decide in the next two months whether to add
new quality terms to its milling wheat futures contract 0#BL2:, in line with
rules set by silos to ensure delivery of suitable wheat out of a poor French
crop. 
    
    KLOECKNER 
    The German steel trader sees growth of more than 2 percent in the European
steel industry next year, its chief executive told Sueddeutsche Zeitung.
 
    
    ABENGOA 
    Abengoa shareholder FR Alfajor Holdings, a company that groups stock owned
by U.S. private equity firm First Reserve Corp., is placing about 4.25 percent
of the Spanish renewable energy firm in the market. The placement should be
finalised on Friday. 
    
    SMITH & NEPHEW 
    London-based medical device maker Smith & Nephew PLC has agreed to pay $11.3
million to settle allegations that it sold the U.S. government devices it
claimed were U.S.-made but actually came from Malaysia. 
    
    FOXTONS 
    As many as 20.5 million shares, or 7.3 percent of Foxtons, are being offered
in an accelerated bookbuild by Credit Suisse and Numis, Bloomberg News reported,
citing a person familiar with the sale.
    
    ATLAS MARA /BOB DIAMOND
    Atlas Mara, the African investment vehicle of former Barclays boss Bob
Diamond, is in talks to buy a $275 million stake in Union Bank of Nigeria
, a person familiar with the matter said on Thursday. 

 (Reporting by Blaise Robinson; Editing by Sudip Kar-Gupta)