Europe Closes Sharply Higher After US Jobs Data
European shares closed sharply higher on Friday after the U.S. government's employment report showed employers added slightly more jobs than expected in May. The euro also fell to a session low of $1.32 when the report was released.
The pan-European FTSEurofirst 300 Index closed provisionally 1.4 percent higher at 1,194.94 points, after official data showed 175,000 jobs were added in May, indicating the U.S. economy was expanding modestly, but not enough for the Federal Reserve to pare back its bond-buying program. The unemployment rate edged up to 7.6 percent.
Despite the uptick in global markets after the news, Doug Cote, the chief market strategist at ING U.S. Investment Management, said he was disappointed.
"This number was not that impressive and I don't see the lift off that we should have seen by now if quantitative easing was working — we were barely above the consensus, but for it to be a really good number, it had to be above 200,000. And judging by this number, it is clear that QE3 [the third round of quantitative easing] is not creating sustainable growth," he said.
Employment is a key indicator for the Federal Reserve, and Chairman Ben Bernanke has indicated the central bank could start tapering off its $85 billion bond purchases if the jobs market shows consistent improvement. Other Fed officials have also fanned expectations they are prepared to consider downsizing the asset purchase program.
Also on Friday, the German Bundesbank cut its growth outlook for Germany for 2013 and 2014 on Friday, one day after the European Central Bank repeated its view that a gradual euro zone recovery will begin later this year.
However, industrial data for Germany out on Friday topped expectations. The figure for April showed a 1.8 percent increase on March.
In addition, the Turkish Prime Minister Tayyip Erdogan announced that the protests that have swept through the country must end. After returning from a trip to North Africa early on Friday morning, Erdogan addressed thousands of supporters at Istanbul airport.
"These protests, which are bordering on illegality, must come to an end immediately," Erdogan said, adding that accusations of the excessive police force were being investigated.
Meanwhile, French President Francois Hollande is continuing his visit to Japan on Friday. He is meeting Prime Minister Shinzo Abe to discuss the need to combat economic decline, plus cooperation on nuclear technology.
Royalty Pharma Ups Bid for Elan
In stocks news, Royalty Pharma raised its hostile bid for Ireland's Elan to $8 billion on Friday, coming back for the third time after just 7.5 percent of shareholders accepted the last offer.
In addition, Markit, a U.K.-based data valuation company, told CNBC it was working on an alternative to Bloomberg's now-controversial "chat" function.
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