Euro area accelerating economy translating into faster job creation and stronger inflation pressures

The euro area’s accelerating economy is translating into faster job creation and stronger inflation pressures. A key gauge of activity rose to a near six-year high in March, and employment increased the most since July 2007, with hiring picking up both in services and manufacturing. The jump in the headline IHS Markit Purchasing Managers Index compared with economists’ expectation for a decline and the latest reading is in line with a quarterly economic expansion of 0.6%. That’s faster than the 0.4% pace in the last three months of 2016.

A broadening recovery has so far allowed the currency bloc to weather a period fraught with uncertainties ranging from the UK’s Brexit vote to the US administration’s trade policies, as well as upcoming elections in a number of euro-area countries. As momentum gathers and a mostly oil-driven spike in inflation firms, the European Central Bank is coming under increasing pressure to plan an exit from its extraordinary stimulus.

A gauge of euro-area factory activity jumped to 56.2 in March from 55.4 in February and an index of services surged to 56.5 from 55.5. Both are at the highest in 71 months and well above the key 50 level. The composite measures for both the French and German economies unexpectedly improved, while in France, selling prices rose for the first time since 2012.

US stocks fell the most since the week leading up to the US election as President Donald Trump suffered a major setback when he was forced to pull his health-care bill from a vote amid dissent among congressional Republicans. Investors also turned to bonds as US Treasuries rallied for the second week

Japan's Nikkei share average gained on Friday as the yen took a breather from its recent strength, but the Nikkei still logged a weekly loss. The Nikkei ended up 0.9 percent at 19,262.53, shrugging off early weakness and moving decisively away from the previous session's 1-1/2-month lows. It still shed 1.3 percent for the week. The broader Topix was down 1.4 percent for the week.