European shares were lightly affected by the release of U.S. jobs data, while investors also reacted to the potential of increased stimulus from China.Commodities reported the strongest performance of the 19 total sectors listed amongst the Stoxx Europe 600 Index. Commodities rose again lengthening its gains streak to six days, raw-material prices also increased. The index as a whole was affected by the negative performance of insurance companies. The Stoxx 600 increased by as much as 1.3% after the U.S. Department of Labor released data, which displayed more jobs were created in the U.S. in February than was previously estimated. Meanwhile wages in the U.S. declined, which came as a surprise to most economists. Yet, the Stoxx 600 is on pace for its third straight weekly increase, which would be enough for its longest weekly streak in nearly five months. After bottoming out in early February, the index has since regained its strength due to the strong performances of energy, commodity, and bank stocks.
Benno Galliker, a trader at Luzerner Kantonlbank AG, shared his view on the U.S. Department of Labor’s report and what it could foreshadow, “The numbers show the U.S. economy is still growing… These are really good numbers — maybe they were even too good. If they’re too good, the interest rate hike comes back into play.”
Fed officials will convene for their next scheduled meeting on March 15th, with investors currently pricing in a roughly 10% chance that the Federal Reserve will raise interest rates this month. However, for a summer rate increase or winter rate increase, the probability rises to 39% and 68% respectively. Meanwhile, the European Central Bank is set to declare their plan for interest rates amongs the group of nations on the 10th. ECB President Mario Draghi suggested in January that the central bank could potentially inject more stimulus this month. Industrial metals rose due to the positive outlook pertaining to China potentially releasing its strategy to resuscitate economic growth when the National People’s Congress holds an annual meeting this Saturday.