As investors further scale back bets on an imminent rate cut by the Federal Reserve (Fed), attention now shifts to Friday's inflation data.
January's job creation figures exceeded expectations and unemployment dropped to 4.3%, but some voices warn that the statistics may overstate the strength of the labor market, given that revisions to previous months showed that in 2025 only 181,000 jobs were created, far from the 584,000 previously estimated.
Brokerage Renta 4 highlights that "the market is giving greater weight to the strong January employment data, with yields rising (more so in the short term than in the long term), pushing the Fed's first rate cut of the year from June to July and eliminating the possibility of a third cut in 2026."
According to IRPR, an LSEG money market futures tool, there is about a 20% probability of an interest rate cut in March, while for June the percentage rises to just over 60%.
Among corporate headlines, Siemens raised its annual forecast after beating expectations in the first quarter, lending support to European markets. Meanwhile, Outokumpu beat expectations with its fourth-quarter operating profit and forecasted an increase in short-term results.
Overall, the outlook for European corporate health has improved – according to LSEG data – although a decline in fourth-quarter earnings is still expected, which could mark the worst performance in the last seven quarters.
At 08:02 GMT on Thursday, Spain's IBEX 35 stock index was up 76.20 points, or 0.42%, to 18,120.70 points, while the FTSE Eurofirst 300 index of major European stocks advanced 0.55%.
In the banking sector, Santander rose 0.38%, BBVA gained 0.84%, Caixabank advanced 0.70%, Sabadell added 0.68%, Bankinter was up 0.43%, and Unicaja Banco climbed 0.96%.
Among major non-financial stocks, Telefónica slipped 0.14%, Inditex gained 0.81%, Iberdrola fell 0.28%, and Cellnex added 0.14%.
Repsol stood out, rising 0.64% amid positive news flow. Libyan authorities awarded several oil and gas exploration blocks to foreign oil companies, including Repsol, while Chris Wright, US Secretary of Energy, visiting Venezuela, is expected to meet with executives from Chevron and the Spanish oil company, among others, to discuss the recovery of the South American country's oil industry.
(Reporting by Tomás Cobos, editing by Jorge Ollero Castela)
