European stocks steady before US labour data provide Fed clues

The Stoxx Europe 600 Index edged less than 0.1% higher at 12:52 p.m. in Paris.

European stocks steadied on Friday before the upcoming US jobs data is expected to give investors better clarity about the Federal Reserve’s next move.

The Stoxx Europe 600 Index edged less than 0.1% higher at 12:52 p.m. in Paris. The automotive sector outperformed, rising 1.2% as the European Union voted to impose tariffs as high as 45% on electric vehicles from China.

Among individual stocks, DSV A/S jumped after the Danish freight-forwarding company sold €5 billion worth of new shares without resorting to a discount to finance its takeover of DB Schenker.

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Europe’s regional benchmark index is on course for a weekly loss of more than 2%. The sentiment boost from China’s recent stimulus announcements is fading amid escalating tensions in the Middle East. Oil is headed for its strongest weekly increase in two years on fears that Israel may decide to strike Iranian petroleum facilities in retaliation for a missile assault on its territory.

Amid all the geopolitical uncertainty, investors are looking for further signals on the health of the US economy. Economists anticipate that hiring picked up slightly in September, an outcome that would ease lingering concerns that labor demand is deteriorating.

Alexandre Baradez, chief market analyst at IG in Paris, said that a buoyant labour market might encourage US policymakers to cut interest rates at a slower pace than currently expected.

“Good news on the front of US jobs could morph into headwinds for markets,” he said.

Softer hiring and a rise in the jobless rate earlier this year were major drivers behind the Federal Reserve’s decision to start its policy-easing campaign with a large half-a-point cut in interest rates last month.

© 2024 Bloomberg

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