PARIS (Reuters) – Major European stock markets were trading slightly higher on Tuesday morning as investors awaited the release of the official U.S. employment report on Friday, which could influence the trajectory of rates in two weeks.

In Paris, the CAC 40 gained 0.22% to 7,679.5 points at around 07:50 GMT. In London, the FTSE 100 gained 0.03%. In Frankfurt, the Dax advanced 0.28% after reaching a record high of 18,987.62 points during the session.

The EuroStoxx 50 index rose by 0.12%, the FTSEurofirst 300 by 0.03%. The Stoxx 600 gained 0.02%, supported by the rise in the industrial sector (+0.50%) which offset the fall in the mining index (-0.48%).

Futures on Wall Street point to a 0.09% drop for the Dow Jones, but a 0.08% rise for the Standard & Poor’s 500 and a 0.09% rise for the Nasdaq following a long weekend due to Labor Day in the United States.

The U.S. Department of Labor’s official report on August job creation, wages and unemployment will be released Friday. Before that, investors will see the Jolts survey of job openings on Wednesday and the ADP survey of job creation on Thursday.

The data is key as Fed officials hope a slowdown in the labor market will pave the way for rate cuts at their Sept. 17-18 policy meeting.

Markets are pricing in a 25 basis point (bps) cut with a 69% probability and a 50 bps reduction with a 31% probability, according to the CME FedWatch barometer.

“If the (employment) data remains strong, a 25bps cut is more likely. However, weak nonfarm payrolls, especially if they fall below 130,000 with a further rise in the unemployment rate, could push the rates market closer to a 50bps cut,” wrote Charu Chanana, head of FX strategy at Saxo.

The publication this Tuesday at 2:00 p.m. GMT of the ISM manufacturing index in the United States for the month of August will provide elements on the evolution of the American economy.

In terms of values, Airbus is stable, while Rolls Royce rebounds by 4.2% after losing 6.5% on the stock market on Monday following information from a source on a failure of an engine component in the fleet of 48 Airbuses of Cathay Pacific Airways. The British engine manufacturer confirmed on Tuesday that it was the supplier of this component.

French night vision technology group Exosens climbed 5.84% after saying on Tuesday that it was on track to meet its financial targets, the day after announcing the completion of its acquisition of Centronic.

Valneva gained 3.78%, posting one of the best performances on the SBF 120, after publishing new positive phase 2 data on its Lyme disease vaccine candidate on Tuesday.

Also in healthcare, Novo Nordisk rose 1.33% after announcing on Monday that the shortage of its diabetes drug Ozempic had worsened and was expected to continue until the fourth quarter amid rising demand.

In Zurich, Swiss Life (+2.04%) was boosted by the publication on Tuesday of a half-year result that exceeded expectations, thanks to the solid performance of its asset management and insurance activities in France.

(Written by Claude Chendjou, edited by Kate Entringer)

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