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European stocks edge lower; gloomy data weighs ahead of U.S. payrolls

Published 02/12/2022, 10:22
© Reuters.
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By Peter Nurse

Investing.com - European stock markets traded largely lower Friday, with gloomy data illustrating the difficult economic circumstance in Europe as investors cautiously await the release of the key monthly U.S. jobs data.

At 04:00 ET (09:00 GMT), the DAX index in Germany traded 0.1% higher, while CAC 40 in France traded down 0.4% and the FTSE 100 in the U.K. dropped 0.5%.

Economic data released Friday showed France reporting the sharpest drop in its industrial production in 19 months, falling 2.6% in October from September, a second straight monthly drop

Earlier in the day, the Eurozone's largest economy, Germany, said its exports had also started the fourth quarter in weak fashion, falling by 0.6% from September, also the second straight monthly decline.

Inflation in the Eurozone fell more than expected in November, but remained near record levels at 10% on an annual basis.

The European Central Bank has to negotiate these difficult economic waters, as it is tasked with maintaining inflation around 2% in the medium term, but the Eurozone looks set to enter recession in the near future.

ECB President Christine Lagarde warned on Friday that some European governments' fiscal policies could lead to excess demand, prompting the central bank to have to tighten monetary policy more than would otherwise be necessary.

Also prompting caution Friday is the scheduled release of the monthly U.S. jobs report later in the session. Economists expect about 200,000 jobs were added in November, which would indicate a slowdown in job creation from 261,000 the prior month.

Equity markets have benefited this week from comments by Federal Reserve Chair Jerome Powell indicating that the U.S. central bank is considering slowing the pace of its interest rate increases at its final policy-setting meeting later this month.

In the corporate sector, Credit Suisse (SIX:CSGN) rose 0.9% after the chairman of the embattled Swiss bank, Axel Lehmann, said in a TV interview with Bloomberg that outflows from the lender have basically stopped and that it is seeing partial inflows.

Analysts at influential investment bank JPMorgan earlier Friday suggested that continued client outflows could spark takeover speculation and may lead to the partial sale of its domestic unit.

Crude oil prices edged lower Friday but are set to post a weekly advance on hopes China is set to further relax its COVID restrictions, boosting economic activity and thus demand for energy at the biggest crude importer in the world.

Beijing announced it would allow some infected people to isolate at home in the nation’s capital, another softening of the country’s strict COVID stance, raising hopes of a broader easing of its quarantine protocols in coming days after a period of civil unrest.

Elsewhere, the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, meets virtually on Sunday to decide future production levels, while European Union governments have reportedly agreed on a $60 a barrel price cap on Russian seaborne oil.

By 04:00 ET, U.S. crude futures traded 0.4% lower at $80.88 a barrel, while the Brent contract fell 0.2% to $86.67.

Both benchmarks were on track for their first weekly gains after three consecutive weeks of decline.

Additionally, gold futures traded flat at $1,815.30/oz, while EUR/USD traded 0.1% higher at 1.0534.

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