European market outlook: Stocks seen higher ahead of lackluster trade

European equities were called higher, recovering from yesterday's losses driven by the highest US unemployment figure in more than 2 decades. A lackluster trading day is expected due to Wall Street being closed today. The DAX future and the CAC future were both up 0.5%. Most Asian stocks pared losses, but were still in the red. The Nikkei fell 0.6%. The ASX dropped 1.3%. The Shanghai Index contiuned its 2day rally and gained 0.7%.

The European calender starts with Swiss CPI at 715 GMT. German, UK, EZ Services PMI and UK Halifax house prices will be released around 800 GMT. Eurostat will publish EZ retail sales at 900 GMT.

The Euro and Sterling recovered from yesterday's declines as investors thought that weak US employment data and vanishing recovery hopes had exaggerated demand for safe haven currencies. EUR/USD was up 80 pips to 1.4015. Cable jumped 92 to 1.6421. USD/JPY was flat at 96. EUR/GBP was unchanged at 0.8530. EUR/JPY increased 90 to 134.60. GBP/JPY gained more than a number to 157.75.

The worse-than-expected US NonFarm Payrolls data spurred global bond demand as investors sought more security. All major bond yields slipped between 5 and 14 bp compared to the quotes before the release of the US employment data. The Bund future lost 7 ticks to 121.58. The Schatz was flat at 1.23%. The Bund gained 1 to 3.34%. The 2yr and the 10yr Gilt were flat at 1.29% and 3.74%, respectively. Elsewhere, the 10yr T-note was flat at 3.50%. The 10yr JGB was unchanged at 1.33%.

Oil prices fell below $67 on bleak US employment data. WTI was up to $66.83. Brent gained 8 cents to $66.72.