Morning MoneyBeat Europe: Stocks Jump as Fed Rate Increase Fades

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European stocks surged at the open Monday as investors took the weekend to digest weak U.S. jobs data, a disappointing number that sparked expectations that the Federal Reserve will have to delay raising interest rates into 2016 as the U.S. economy may not be robust enough to warrant an increase.

U.S. non-farm payrolls rose by 142,000 in September, sharply below economists' estimates, leaving the unemployment rate unchanged at 5.1%.

"Economic data around the globe is coming in disappointing; with what started in China now rippling out across everyone’s shores,” said Jonathan Sudaria at London Capital Group in a note.

“In light of this slowdown, expectations are that central banks will err on the dovish side, with Fed and BoE expected to refrain from hiking rates and the PBoC, BoJ and ECB all expected to help out with some form of stimulus," he said.

On Saturday, Federal Reserve Bank of Boston President Eric Rosengren said that his confidence that the U.S. central bank can raise rates soon has diminished in the wake of underwhelming employment data.

"The jobs report was disappointing; it seems to validate the decision" of Fed officials to hold off on lifting interest rates off near zero levels at their meeting last month, Mr. Rosengren said in an interview with The Wall Street Journal. The performance of the September jobs data, "highlights that we need to continue to monitor how the data is coming in to determine when it is appropriate" to boost the cost of borrowing, he said.

In Asia, Chinese firms listed in Hong Kong led gains on expectations Beijing will take steps to accelerate growth while Japanese equities advanced after the release of mixed economic data.

Meanwhile, the World Bank downgraded its economic growth forecasts for the East Asia and Pacific region to 6.5% this year from 6.7% previously. China's expected growth rate was cut to 6.9% from 7.1%.

Watch for: Eurogroup Meeting of eurozone finance ministers; Eurozone and U.K. services PMI; EU retail sales; U.S. ISM Non-manufacturing report on business; U.S. global services PMI.

Market Snapshot: FTSE 100 up 1.84%, CAC 40 up 2.65% and DAX up 1.91%. Nikkei closed Monday up 1.58%. Brent crude up 0.71% at $48.47. Gold down 0.08% at $1135.70. EUR/USD at $1.1248. Ten-year Treasury yield higher at 1.994%, Bund yield higher at 0.523%, Gilt yield higher at 1.630%.

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