Europe rallies after US jobs data, DAX closes up 2%

European shares closed sharply higher on Friday after the U.S. monthly jobs report showed the economy adding 321,000 jobs in November, exceeding expectations.

The STOXX 600 index ended up around 1.6 percent, with autos and banks sectors gaining over 2 percent, leading the charge higher.

Nonfarms in focus


Nonfarm payrolls smash expectations

Job creation surged in November, with the U.S. economy adding a dazzling 321,000 positions -- economists were expecting 230,000 new nonfarm payrolls jobs for November. The reported number for October was revised higher to 243,000 jobs. The unemployment rate held steady at 5.8 percent.

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The German DAX unofficially ended over 2 percent higher after U.S. jobs data was released, even as the Bundesbank halved its 2015 growth forecast for Germany on Friday. The central bank also trimmed its growth estimate for this year, but President Jens Weidmann said there were signs that current weakness would soon be overcome, however.

French stocks also surged over 2 percent higher. On the data front, Europe's statistics agency, Eurostat, confirmed its previous estimates of 0.2 percent growth in the euro zone in the third quarter.

U.S. stocks also rose on Friday, lifting the Dow to another record, as investors debated the implications of a stronger-than-expected November payrolls report on the timing of interest-rate hikes ahead by the U.S. Federal Reserve.


ECB in focus

The European Central Bank (ECB) opted to keep monetary policy unchanged on Thursday, prompting a rebound in the euro. Those hoping that Draghi would announce a start to sovereign bond purchases were disappointed, but there were reports later in the day that the bank would launch additional quantitative easing (QE) measures in early 2015.

Also on Thursday, the Bank of England decided to keep its base interest rate at a record low of 0.5 percent – in place since March 2009 – and the amount of asset-purchases unchanged at £375 billion ($588 billion).

Closely watched bond investor Bill Gross lambasted central banks around the world for unconventional monetary easing and advised investors to curb risk-taking going into 2015, Reuters reported late Thursday. He said global markets are reaching "the point of low return" and diminishing liquidity.

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