The Spanish stock index IBEX 35 opened with a slight rebound on Thursday, extending the advance of the previous day, when it managed to regain 11,000 points, although this level will be put to the test on Friday with the publication of the monthly labor market report in the United States.

The job creation data could help to cool hopes for interest rate cuts by the Federal Reserve (Fed) this year, if there is a notable increase in jobs, as the US central bank could interpret it as a sign of persistent inflation.

"The supply vs. demand imbalance is improving recently: Vacancies are falling, layoff notices are rising, the worker quit ratio is moderating, and hours worked are falling. All this could lead to a moderation in job creation (213k vs 275K ant) and wages (+4.1% vs +4.3%)," said analysts at Bankinter.

"However, these experts warn that "the most recent macro data show unexpected strength (...). That is why expectations of rate cuts by the Fed are cooling. A bad wage data (in the labor report) could continue to tilt investor sentiment to the 'hawkish'/hard side."

The term "hawkish" refers to positions in favor of monetary tightening.

Still, despite the better-than-expected ADP private sector employment numbers, Fed officials, including Chairman Jerome Powell, insisted that debt cost cuts will begin this year.

In fact, Powell went so far as to say that the latest macroeconomic data - which have shown unexpected economic strength - "have not substantially changed the outlook".

Against this backdrop, markets now put the odds of a U.S. interest rate cut in June at 60.6%, according to interest rate futures on LSEG's IRPR tool, which point to 69 basis points of cuts this year, or just under 3 cuts of 25 basis points each.

In Europe, market expectations are also for a first rate cut in June, especially after Robert Holzmann, a leading advocate of monetary tightening at the European Central Bank (ECB), expressed openness to such a move, although he issued a warning about the danger of getting ahead of the Fed.

In any case, the market will receive more information on Thursday about the deliberations within the ECB with the release of the minutes of the bank's last meeting, which took place in March.

Against this backdrop, at 07:47 GMT on Thursday the selective Spanish stock market index Ibex-35 was up 40.30 points, 0.37%, to 11,072.60 points, while the FTSE Eurofirst 300 index of large European stocks < .FTEU3> advanced 0.05%.

In the banking sector, Santander rose 0.98%, BBVA gained 1.40%, Caixabank advanced 0.83%, Sabadell gained 0.20%, Bankinter gained 0.38% and Unicaja Banco rose 0.61%.

Among the large non-financial stocks, Telefónica gained 0.91%, Inditex fell 0.22%, Iberdrola gained 0.57%, Cellnex fell 0.06%, and the oil company Repsol rose 0.06%.

(Information by Tomás Cobos; edited by Javi West Larrañaga)