European Stocks Rise After Payrolls Boost; Eurozone Retail Sales Upcoming

European stock markets experienced gains on Monday, buoyed by a favorable handover from Asia following a strong U.S. jobs report from last week, as the new corporate earnings season approaches.

By 03:05 ET (07:05 GMT), the DAX index in Germany was up 0.2%, the CAC 40 in France rose 0.3%, and the FTSE 100 in the U.K. climbed 0.3%.

### Europe Benefits from Payrolls Afterglow

The major European indices kicked off the week positively, benefiting from advances in Asia. Japan’s Nikkei led this rally, rising by 2%, after the recent U.S. nonfarm payrolls data significantly surpassed expectations.

Released on Friday, the U.S. jobs report indicated that the economy added 254,000 jobs in September, well above the anticipated 150,000. This development has shifted market sentiment from concerns about a potential U.S. recession to a more optimistic outlook concerning a “soft landing,” denoting a cyclical economic slowdown that avoids recession.

### Eurozone Retail Sales Due

In Europe, economic indicators presented a less favorable picture. Data revealed a significant decline of 5.8% in German factory orders for August, a stark contrast to the previously revised gain of 3.9% the month before. Moreover, a recent Ifo survey indicated that the business climate in the German retail sector has softened, with retailers reporting a slightly worse current situation compared to the previous month and expressing greater pessimism about the upcoming months.

Today’s highlight will be the release of eurozone retail sales data, which will provide insight into consumer strength during challenging economic conditions. A modest increase of 0.2% is expected for August, building on a previous gain of 0.1%.

Additionally, key figures from the European Central Bank, including Chief Economist Philip Lane and board members Piero Cipollone and Jose Luis Escriva, are set to speak later in the day, likely reinforcing the bank’s commitment to a brisk pace of easing, following similar signals from President Christine Lagarde.

### Quarterly Earnings Season Draws Near

As the corporate sector prepares for the third-quarter earnings season, the U.S. banking sector is leading the way with major firms set to report results this Friday. Notable institutions such as JPMorgan Chase, Wells Fargo, and BlackRock are among those expected to release their earnings, with European counterparts to follow closely thereafter.

In other news, shares of Shell rose by 0.4%, even as the energy giant reported a sharp decline in refining profit margins for the third quarter due to decreased global demand and weakened earnings from oil product trading.

### Crude Pares Last Week’s Gains

Oil prices dipped slightly on Monday, retracing some of last week’s substantial gains as traders remain focused on developments in the Middle East. By 03:05 ET, the Brent crude contract had fallen 0.2% to $77.86 per barrel, while U.S. crude (WTI) traded 0.2% lower at $74.25 per barrel.

Last week, oil prices recorded their most significant weekly gains in over a year amid rising tensions in the Middle East. Following a barrage of missiles fired at Israel from Iran, Israel vowed to retaliate, heightening fears of a broader regional conflict. On Monday, Israelis observed the anniversary of a Hamas attack that has led to ongoing warfare, further escalating concerns about a wider conflict in the region.