European Shares Edge Lower as Key U.S. Job Market Data Looms

By Scott Kanowsky 

Investing.com -- European stocks opened slightly lower on Friday, as investors awaited the release of an all-important U.S. job market report that is expected to help determine the path forward for Federal Reserve monetary policy.

By 03:50 ET (07:50 GMT), the pan-European STOXX 600 fell 0.25%, the DAX in Germany traded 0.36% in the red, the CAC 40 in France dropped 0.20%, and the U.K.'s FTSE 100 decreased by 0.12%. However, these bourses are still set to register weekly rises.

The declines followed muted trading volumes in Asia on account of a week-long holiday in China. But most indices in the region were on course to make gains over the week after they slumped to their worst monthly performance in September since the early days of the COVID-19 pandemic.

Wall Street indices provided a weak lead-in for equity markets worldwide, ending a whipsaw session lower on Thursday as rising yields weighed.

U.S. nonfarm payrolls data due later on Friday is expected to factor into the Fed's plans to hike rates. Continued signs of strength in the labor market may give the central bank enough space to keep raising borrowing costs over a longer period of time.

Traders are currently pricing in a nearly 73% chance that the Fed will raise rates by 75 basis points during its next meeting, according to CME's FedWatch tool. The central bank has already signaled that U.S. interest rates will end the year above 4%, pointing to more pressure on risk-driven assets.

Elsewhere, data showing a bigger-than-expected 1.3% slide in retail sales in Germany in August also dented sentiment in Europe.

In corporate news, Credit Suisse Group AG (SIX:CSGN) has offered to repurchase $3B worth of its own debt in a bid to solidify confidence in the embattled lender.

J D Wetherspoon PLC (LON:JDW) also narrowed its annual loss compared to the previous year despite surging labor and energy costs. Shares in the U.K. pub chain rose.

Elsewhere, oil prices gained as markets eyed the release of the nonfarm payroll numbers and are on track to deliver strong weekly gains after the OPEC+ oil group agreed to deeply slash output by two million barrels per day in the coming months.

London-traded Brent Oil Futures climbed 0.26% to $94.67 a barrel, while West Texas Intermediate crude futures increased by 0.32% to $88.73 per barrel. Prices have rallied for four straight sessions, recovering sharply from eight-month lows hit earlier as markets positioned for much tighter supply conditions this year.

Additionally, gold futures moved down by 0.10% to $1,719.10/oz, while EUR/USD exchanged hands at $0.9801.