Trading is underway in the US and markets are up, boosted by the better-than expected non-farm payrolls report:

• Dow Jones: +0.5% at 26,437

• S&P 500: +0.5% at 2,932

• Nasdaq: +0.7% at 8,092

The strong US jobs report works against President Trump’s call for a cut in interest rates, economists suggest.

James Knightley, chief international economist at ING, says:

The US jobs market continues to surge with the unemployment rate at the lowest level since December 1969. The market is pricing Fed rate cuts, but we really don’t see the need.

Erik Norland, senior economist at CME Group:

Today’s employment report should put to bed the notion that the Fed will cut interest rates anytime soon. Job creation blew away expectations in April with 263K jobs created. That’s 89K more than consensus net of revision. Moreover, unemployment fell to 3.6%, a fifty year low.

Alex Lydall at currency specialist Foenix Partners:

A defiant Fed chairman Powell will be revelling in his glory today after yet another bullish headline payroll figure and declining unemployment rate. We saw evidence on Wednesday that the Fed Chair was not going to be shoved around by Mr Trump’s bully-boy tactics, hailing the economic progression and increasingly strong Labour sector as reasons why financial markets don’t at this stage need to speculate about rate cuts.

Dominic Rushe, business editor for Guardian US, reports on the better-than-expected non-farm payroll report:

The unemployment rate fell to 3.6% in April, from 3.8% in March.

Wage growth however was unchanged at 3.2%.

The US economy added 263,000 jobs in April, smashing expectations of 185,000.

It was also sharply higher than the 189,00 jobs added in March (revised down from 196,000).

The World Bank has increased its emergency support for the three southern African countries hit by the devastating Cyclone Idai in March to $700m.

Reuters reports:

More than 1,000 people were killed across Mozambique, Zimbabwe and Malawi after Cyclone Idai, the worst cyclone in decades, lashed the eastern Indian Ocean coast bringing heavy winds and rains.

New World Bank President David Malpass, who is in Africa for his first foreign trip, toured the affected areas in Mozambican port city of Beira on Friday.

The bank said it was activating the International Development Association’s (IDA) Crisis Response Window (CRW) to provide up to $545 million in total for the three countries.

The IDA is the bank’s fund for the poorest countries.

“This is in addition to nearly $150 million in resources that have recently been made available from existing projects. Together, total World Bank support to the three countries’ recovery reaches around $700 million,” the bank said.

“The World Bank Group is working closely with our partners to help the population recover from these terrible storms, build back stronger than before, and improve countries’ resilience to natural disasters,” Malpass said in a statement.

As usual, the FTSE’s gain is the pound’s loss and sterling is down 0.3% against the dollar at $1.2995.

It is also a smidgen lower against the euro at €1.1656.

Connor Campbell at Spreadex gives his take:

As cable sank under $1.30, the FTSE managed to re-cross 7400, held aloft by its rebounding commodity sector.

Though the services PMI came in at a solid, and expected, 50.4, the pound couldn’t help but dip 0.2% against the dollar, the currency seemingly more interested in any Brexit updates – they’ve been thin on the ground since Easter – than the state of the UK’s data.

This, alongside a sharp upswing from its oil and mining stocks, and HSBC’s 3% rise post-earnings, helped the FTSE gallop 0.8% higher, pushing it back above 7400.

Here in the UK, the FTSE 100 remains the best performer of its major European peers, up 0.9% or 62 points at 7,413.

HSBC is the biggest FTSE riser, currently up 3% at 687p. Kalyeena Makortoff, the Guardian’s banking correspondent, explains why:

HSBC shares were propping up the FTSE 100 on Friday after the lender reported a 30% jump in profits helped by lower costs and a strong performance from its Asian business.

The London-headquartered but Asia-focused bank said pre-tax profits rose from $4.7bn to $6.2bn in the first quarter, beating City estimates for around $5.6bn. It came as operating costs fell 12%.

John Flint, chief executive said:

These are an encouraging set of results, particularly in the context of heightened economic uncertainty globally. We remain focused on executing the strategy we outlined last June, while also being alert to risks in the global economy.

Brexit is still on the bank’s radar, but finance chief Ewen Stevenson told journalists that it was cautiously moving forward with plans to move bankers from London to Paris as part of its contingency plans.

We previously talked about up to 1,000 staff needing to move. We’re obviously pacing that. Some of that can come from hiring people into Paris rather than them having to transfer out of London, but we will pace our activity alongside the timetable for Brexit.

And we clearly don’t want to be taking definitive decision until we have further clarity on how definitive Brexit is one way or the other.

It’s non-farm payrolls day in the US, and the main event of the day as far as many investors will be concerned.

Economists are predicting that 185,000 jobs were added in April, up from 196,000 in March.

US futures are currently up ahead of the jobs numbers of 1.30pm:

• Dow futures up 0.2%
• S&P 500 futures up 0.3%
• Nasdaq futures up 0.5%

The annual inflation rate in the eurozone rose to 1.7% in April from 1.4% in March according to the ‘flash’ estimate from statistics office Eurostat.

Energy prices and services inflation were the biggest drivers of the rise.

Core inflation - which strips out volatile elements such as food and energy – also rose, to 1.2% from 0.8%.

Christina Iacovides at Capital Economics said the rise in core inflation won’t last and was partly driven by the timing of Easter when travel costs tend to rise.

While we do not yet have a full breakdown of the eurozone data, we know that the jump in core inflation was due to a sharp rise in services inflation, which we suspect was mostly driven by a rise in package holiday prices and airfares, given that the timing of Easter boosted prices for these items in March last year but April this year.

Looking ahead, we expect core inflation to fall back to about 1% in May, and remain broadly unchanged over the next couple of years. And as energy inflation declines we expect the headline rate to fall below 1% towards the end of this year.

The detail behind the services sector shows the sector – which accounts for more than three quarters of the UK economy - is being held back by Brexit uncertainty.

The services PMI, which includes hotels, bars, hairdressers, financial advisers and a whole host of others, showed that new business in the sector fell for a fourth month, as consumers and firms reined in spending.

Duncan Brock, group director at the Chartered Institute of Procurement & Supply (which co-produces the report) said there were some warning signs behind the headline return to growth.

Though elements of stability returned this month with a small improvement in the sector’s fortunes, both consumers and corporate clients continued to be apathetic about spending on services with a fall in new orders for a fourth consecutive month.

Sales from overseas customers also declined, continuing the trend seen since September 2018, so there was little sign of a boost to business from outside the UK.

Britain’s huge services sector just about grew in April according to the PMI survey just out.

The headline index on the IHS Markit/CIPS survey rose to 50.4 last month from 48.9 in March, where anything above 50 signals growth. It was almost bang in line with economists’ expectations of 50.5.

Intu, owner Manchester’s Trafford Centre and Lakeside in Essex, is the latest company to warn on the troubled state of shop-focused retailers.

Shares in the shopping centre company are down 7% this morning after it said its rental income would fall more than previously expected this year as shops shut at a faster rate.

Intu is expecting a further rise in company voluntary arrangements (CVAs) - an insolvency process which allows struggling firms to close underperforming stores and cut rents.

The company reckons it will now suffer a fall in like-for-like net rental income of 4-6%. Previously it was predicting a drop of 1-2%, but that did not factor in the planned closure of up to 50 Debenhams stores and a wave of expected closures at Sir Philip Green’s Arcadia group which includes the Topshop and Dorothy Perkins brands.

European markets are fairly quiet this morning ahead of the closely watched US non-farm payrolls report at 1.30pm (UK time).

The FTSE 100 is the outperformer so far, boosted by better-than-expected first-quarter numbers from HSBC which has made the bank the top riser this morning, up 2.3%.

• FTSE 100: +0.3% at 7,374

• Germany’s DAX: +0.2% at 12,364

• France’s CAC: +0.1% at 5,546

• Italy’s FTSE MIB: +0.03% at 21,716

• Spain’s IBEX: +0.1% at 9,429

• Europe’s STOXX 600: +0.2% at 389

Ben Broadbent has also been making the point that Brexit uncertainty has had an unprecedented impact on business investment - falling quarter after quarter despite the fact the economy is not in recession.

He told the BBC’s Today programme:

I think [Brexit uncertainty is] having widespread effects. The clearest effect is on business investment. This is what you’d expect and it’s certainly what you’d hear when – as we do - you talk directly to businesses.

What we’ve seen over the past year are successive falls in each quarter in capital spend by businesses. It’s pretty unusual, you’ve never seen that before outside recession and it’s pretty clear I think that that’s a result of the impending Brexit.

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

The Bank of England surprised precisely no one when it left interest rates on hold on Thursday. But, as ever, the more nuanced message was to be found in the detail of the quarterly inflation report and Mark Carney’s press conference.

The broad message was that interest rates are likely to rise faster than markets have been expecting.

Ben Broadbent, deputy governor of the Bank of England, has been speaking to BBC Radio 4’s Today programme this morning to reinforce the message.

He said:

Markets [have been] barely pricing one rise over the next three years and that’s rather a change from six months ago when the expectation was for one rate rise a year.

The market has taken out a couple of the rate rises it had expected six months ago. I should say, one quarter point rate rise a year... I wouldn’t describe that as particularly dramatic. We expect the path of interest rates as and when they do go up, that rise to be limited and gradual.

Asked whether he was planning to apply for the governor role, which will be vacated by his boss Mark Carney in the new year, he said:

I haven’t decided yet.

With a closing date for applications of 5 June, he needs to decide sharpish...

Elsewhere, there’s quite a lot to go at today, with a major focus as always on the non-farm payrolls report in the US.

The agenda

• 9.30am BST: UK services sector PMI survey for April
• 10am BST: Flash estimate of eurozone inflation in April
• 1.30pm BST: US non-farm payrolls and average earnings in April