European Shares Seen Up In Cautious Trade As Broadcom Raises AI Chip Forecast

(RTTNews) - European stocks may open higher on Thursday, with tech shares likely to be in focus after Broadcom beat Wall Street's expectations in its fiscal third quarter and predicted a boom in artificial intelligence chip sales over the next two years. Meanwhile, after U.S. ADP labor figures came in below expectations, new hopes have arisen that signs of weakness in the labor market will lead the Federal Reserve to refrain from raising interest rates later this month. New York Fed President John Willliams said in an interview with CNBC that inflation expectations remain well anchored and there is no "unusual" broadening of the effects of higher energy prices, soothing investor concerns over an imminent Fed rate hike at the upcoming policy meeting scheduled for September 15-16. The focus now shifts to the Labor Department's all-important monthly report on employment due Friday, which includes both public and private sector jobs. Economists expect employment to climb by 55,000 jobs in August after a decline of 23,000 jobs in July. The unemployment rate is expected to tick up to 4.2 percent from 4.1 percent. PMI data from Germany, France, U.K. and the euro zone, Eurozone producer price data for July, and remarks by Federal Reserve Governor Christopher Waller will be in the spotlight later today. Waller said in July that higher rates may be needed in the near term if inflation data remained hot. Asian markets were broadly higher, tracking overnight gains on Wall Street. The Japanese yen held steady after a sudden, brief surge in the previous session. The U.S. dollar index eased while gold edged up nearly 1 percent to $4,430 an ounce. Brent crude prices fell below $95 a barrel after three straight sessions of gains amid renewed U.S.-Iran hostilities over control of the Strait of Hormuz. U.S. President Donald Trump said renewed attacks on Iran would be short-lived while reiterating his claim that the U.S. controls the Strait of Hormuz, a vital route for global crude shipments. U.S. officials have signaled robust energy flows through the key waterway. According to CNN, the American military escorted 40 vessels through the waterway on Tuesday carrying 18 million barrels of oil. U.S. stocks closed higher overnight, with the S&P 500 halting a three-day decline, as a rally in Treasury yields stalled after the release of data showing weaker than expected private sector job growth in August. The ADP report showed private sector employment rose by 38,000 jobs last month, below 48,000 expected and down from an upwardly revised 46,000 jobs in July. That marked the slowest pace of job creation in seven months. Separately, the Fed's Beige Book showed modest economic growth since early July, slightly employment gains and persistent price pressures. The Dow gained 0.6 percent while the tech-heavy Nasdaq Composite and the S&P 500 added around half a percent each. European stocks edged lower on Wednesday due to oil-driven inflation and interest-rate concerns. The pan-European STOXX 600 slid 0.2 percent. While the German DAX dropped half a percent, France's CAC 40 and the U.K.'s FTSE 100 both ended down about 0.3 percent.

(RTTNews) - European stocks may open higher on Thursday, with tech shares likely to be in focus after Broadcom beat Wall Street's expectations in its fiscal third quarter and predicted a boom in artificial intelligence chip sales over the next two years.

Meanwhile, after U.S. ADP labor figures came in below expectations, new hopes have arisen that signs of weakness in the labor market will lead the Federal Reserve to refrain from raising interest rates later this month.

New York Fed President John Willliams said in an interview with CNBC that inflation expectations remain well anchored and there is no "unusual" broadening of the effects of higher energy prices, soothing investor concerns over an imminent Fed rate hike at the upcoming policy meeting scheduled for September 15-16.

The focus now shifts to the Labor Department's all-important monthly report on employment due Friday, which includes both public and private sector jobs.

Economists expect employment to climb by 55,000 jobs in August after a decline of 23,000 jobs in July. The unemployment rate is expected to tick up to 4.2 percent from 4.1 percent.

PMI data from Germany, France, U.K. and the euro zone, Eurozone producer price data for July, and remarks by Federal Reserve Governor Christopher Waller will be in the spotlight later today.

Waller said in July that higher rates may be needed in the near term if inflation data remained hot.