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European Shares May Open On A Soft Note

stockmarkets jan02 06aug20 lt

European stocks are likely to open lower on Thursday as investors await the Bank of England rate decision and the U.S. employment report for directional cues.

The monetary policy announcement from the Bank of England is due at 2.00 am ET. After expanding the QE by GBP 100 billion in June, markets expect the bank to hold the program at GBP 745 billion and the interest rate at a historic low of 0.10 percent.

In the quarterly monetary policy report, to be released with the monetary policy report, the bank is expected to forecast a slow economic recovery from the coronavirus pandemic.

The U.S. dollar struggled ahead of the labor Department's closely-watched monthly jobs report on Friday after data showed U.S. private payrolls growth slowed sharply in July.

Dallas Federal Reserve Bank President Robert Kaplan said during an interview with CNN on Wednesday that the economy needs a continuation of the unemployment benefits to help the economy recover from the coronavirus pandemic.

Asian markets are trading mixed after White House negotiators said they're no closer to agreeing with Democrats on the size and the scope of the latest stimulus package.

"If there's not a deal by Friday, there won't be a deal," Republican Senator Roy Blunt reportedly said.

Gold held steady near record highs while oil prices struggled to hold onto five-month highs reached in the previous session after the EIA reported a much bigger than expected drop in U.S. crude stockpiles.

U.S. stocks rose overnight as investors cheered a surprise quarterly profit from Disney, upbeat service sector activity data and signs of progress in U.S. stimulus talks. Traders largely shrugged off a report showing a substantial slowdown in private sector job growth in July.

The Dow Jones Industrial Average rallied 1.4 percent and the tech-heavy Nasdaq Composite gained half a percent, while the S&P 500 rose 0.6 percent to reach a five-month closing high.

European markets advanced on Wednesday as investors tracked another round of major corporate earnings reports as well as talks on a key U.S. stimulus package.

The pan European Stoxx 600 rose half a percent. The German DAX rose half a percent, France's CAC 40 index climbed 0.9 percent and the U.K.'s FTSE 100 rallied 1.1 percent.

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