On Friday, European stock markets went up because it looks like Russia will start sending gas to Europe again. This happened before the important U.S. jobs report for the month.
By 08:00 GMT (4:00 ET), the DAX in Germany was up 1.1%, the CAC 40 in France was up 0.5%, and the FTSE 100 in the U.K. was up 0.5%.
Russia is likely to start sending gas to Europe again through its main pipeline. Shipment orders posted by the pipeline’s operator show that flows are expected to start up again on Saturday at the same level as before the work.
Related: Futures on European stocks decline; German retail sales surprise positively.
This is good news for western European countries that are scrambling to get energy supplies because they are afraid that Moscow will order more halts this winter.
Still, gains are limited before the U.S. jobs report for August comes out at 8:30 ET (12:30 GMT). This is one of the last pieces of economic data the Fed will see before its September meeting, where it plans to raise its benchmark interest rate again.
Nonfarm payrolls are expected to have grown by 300,000 jobs last month, after rising by 528,000 in July. The report comes just days after Fed Chair Jerome Powell stated that monetary policy must be tightened further to prevent inflation, even if it means laying off more people.
It’s not clear how much the U.S. central bank will raise interest rates later this month, but if payrolls go up, it will be the 20th straight month of job growth. This shows that the job market is able to handle the aggressive rate hikes that have already happened.
The European Central Bank is also expected to raise its interest rates next week. With inflation nearing double digits and at a record high, the question is whether the central bank will go for a 50-basis-point increase, like it did in July, or something even bigger.
Related: European stocks decline a little; French consumer spending plummets.
In business news, Lufthansa (ETR:LHAG) stock went up 1.7%, even though pilots at the German airline went on strike for one day on Friday after failed wage talks. This caused hundreds of flights to be cancelled.
Shell (LON:SHEL) stock went up 1.5% after Reuters reported that the energy giant had narrowed down its list of candidates to replace CEO Ben van Beurden, who is getting ready to leave his job in 2023.
Even though oil prices went up on Friday, they are still on track to lose a lot this week because of worries that China’s COVID-19 restrictions and slower growth around the world will hurt demand.
Also, the finance ministers of the Group of Seven countries are expected to finalise plans on Friday to put a cap on the price of Russian oil in an effort to hurt Moscow’s finances while keeping crude flowing.
The Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, are going to meet at the beginning of next week. Traders will be looking to see what output levels are agreed upon, since Saudi Arabia, the top oil exporter, has been talking about cutting production.
By 4:00 ET, U.S. crude futures had gone up 2% to $88.33 per barrel, while the Brent contract went up 1.8% to $94.08. Both benchmark contracts fell 3% in the last session, reaching their lowest levels in two weeks. They are on track to drop about 5% for the week as a whole.
Related: European stocks recovered in advance of inflation data.
Also, gold futures went up 0.2% to $1,713.05/oz and EUR/USD went up 0.4% to 0.9989.
