GLOBAL MARKETS-European shares up, euro steady before US data

* Stocks add slightly to two-week closing high

* Euro steady, approaching key technical level

* Bunds futures flat; new ECB bond buys eyed

* U.S. non-farm payrolls in focus, due 1330 GMT

By Simon Jessop

LONDON, Dec 3 (BestGrowthStock) – European shares rose ahead of the
release of fresh U.S. jobs data later on Friday, while the euro
paused for breath after bouncing from a 2-1/2 month low.

Both asset classes had opened steady ahead of the
much-watched payrolls data, seeking further evidence about the
extent of European Central Bank bond buying, which had supported
markets in the previous session.

Peripheral euro zone debt outperformed as the ECB continued
purchases, reassuring investors that the bank would continue to
support markets despite the lack of any sign from President
Jean-Claude Trichet it would ramp up the programme. [GVD/EUR]

“The ECB really are the only buyer out there and there’s
certainly some people looking to get out on the client side,” a
trader said. [ID:nLDE6B20AX]

A generally improved economic picture, supporting stock
markets and riskier assets, has been marred by the euro zone’s
fiscal crisis.

By mid-morning, the cost of insuring Portuguese and other
peripheral debt had fallen further, and while the ECB was back
in the market buying Portugal and Ireland bonds, traders said,
its purchases were in small sizes only.

Portugal’s five-year credit default swaps tightened to 430
basis points from 448 basis points, data from Markit showed,
while the premium paid for 10-year Portuguese debt (PT10YT=TWEB: )
over benchmark German bunds (DE10YT=TWEB: ) edged lower.

Elsewhere in the periphery, Ireland’s yield spread over
bunds (IE10YT=TWEB: ) tightened slightly to 595 basis points.

After previously rallying on talk of the ECB bond buying, in
the hope it would help shore up confidence in the euro zone
periphery, the single currency was steady in early trade on
Friday, hovering around a key technical resistance level.

The euro (EUR=: ) traded at $1.3241 at 0958 GMT, above a 2-1/2
month low hit on Tuesday and just below its 100-day moving
average and below key resistance at $1.3334-64, its August peak
and a 38.2 percent retracement of the June-November rally.

“I suspect the euro has bottomed out in the near term and
will test $1.33-34,” said a trader at a Japanese brokerage

Among other currencies, the dollar (.DXY: ) traded down 0.2
percent against a basket of other currencies.


The benchmark FTSEurofirst 300 (.FTEU3: ) share index extended
gains by midmorning, after closing the previous session at a
two-week high, and all eyes remained on the U.S. jobs data,
Justin Urquhart Stewart, London-based director at Seven
Investment Management, said.

“There’s a positive tone to the market, despite all the
negative news on sovereign debt … If the payrolls are
positive, it could easily push the market even higher,” he said.

A strong overnight showing in U.S. stock markets had slowed
by the close of play in Asia, with gains of just 0.1 percent in
the Nikkei (.N225: ), mostly on buying in technology shares.

The MSCI world equity index (.MIWD00000PUS: ) is also higher,
up 0.4 percent, while U.S. stock futures (SPc1: ) are pointing to
a slightly higher open on Wall Street.

Oil (CLc1: ) was steady near 25-month highs following a recent
slew of upbeat U.S. economic data that bodes well for demand
from the world’s top user, and ahead of the jobs report which is
expected to show employment expanded for a second straight month
in November. [O/R]

Non-farm payrolls are forecast to have risen 140,000, with
private hiring increasing by more than 100,000 for a fifth
straight month in November, according to a Reuters survey.

The unemployment rate is forecast to have held steady at 9.6
percent. [ID:nN02238002]

Such a positive reading would add further weight to the
notion the country’s recovery is picking up pace, and follows
data showing the number of jobless benefits claimants hit a
two-year low last week.

The PMI survey of business purchasing managers showed the
euro zone’s service sector economy pulled ahead in November
thanks to strengthening German and French business, although
debt-burdened Ireland and Spain continued to lag behind.
(Reporting by Simon Jessop; editing by Patrick Graham)

GLOBAL MARKETS-European shares up, euro steady before US data