Europe Economy

Europe Stocks Seen Sharply Lower; Eyes on US Jobs

European shares were called sharply lower at the open on Friday following a late sell-off on Wall Street and losses for stocks in Asia overnight.

Share Price chart
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The DAXis expected by spread betters to open 112 points lower with the FTSE 100 seen falling 91 points lower and the CAC is seen shedding 54 points.

Friday's session will be dominated by US non-farm payrolls data which is expected to show just 75,000 jobs where created last month. Some are even more bearish with Goldman Sachs predicting only 25,000 jobs where created in August.

If the data is weak it could pile further pressure on President Barack Obama who on Thursday cut the White House's economic growth estimates. Next Thursday Obama will unveil his latest plan to boost jobs in America in an eagerly awaited speech which could have a major impact on the 2012 presidential election.

In Athens, talks between the government and representatives of the International Monetary Fund and the European Union are being described as tense following a report from Reuters saying Greece's 2011 budget deficit will be at least 8.6 percent of gross domestic product versus the 7.6 percent target.

On Thursday an independent budget auditor quit after a row with the Greek finance minister and there are now concerns that the IMF could withhold the next tranche of aid agreed under last year's 110 billion euro rescue package.

Watch shares in German software giant SAP at the open after a judge ruled the $1.3 billion the group was forced to pay to rival Oracle over a copyright infringement lawsuit was “grossly excessive.” The judge said actual damages where $272 million dollars, paving the way for a far lower payout. Oracle said it is ready to pursue the “full damages”.

Another stock in Germany that is now in the hands of US courts is Deutsche Telekom . AT&T , which is attempting to buy Deutsche Telekom’s T-Mobile USA division, said it will meet with the Department of Justice officials to offer concessions in a bid to win clearance for its $39 billion takeover.

In the UK banking stocks will be in focus after the Financial Times reported Friday that the industry will avoid any major reforms until after the next election in 2015. The report claims the government will instead push the banks to lend more money to businesses in a bid to boost growth.