The FTSE 100 rose modestly on Friday as European equities steadied after this week's bond-market selloff. Traders now wait on the US September jobs report and euro zone inflation data for direction on interest rates, while a broker downgrade and a profit warning from a peer weighed on individual stocks.
FTSE 100 and European peers recover
The FTSE 100 was up 0.10% as of 03:20 ET (07:20 GMT) on Friday. Germany's DAX rose 0.30% and France's CAC 40 gained 0.29%. Sterling added 0.09% to $1.3213. The pan-European STOXX 600 was up 0.4% at 629.18 points by 0720 GMT.
The gains follow a rough session Thursday: the STOXX 600 closed 1.3% lower, its lowest level in more than three months, as global government bond yields hit multi-year highs. Yields have since eased back. Ten-year Treasury yields have retreated from Thursday's high of 5.34% to around 5.25%. German 10-year bund yields have eased to 3.48%, well off Monday's high of around 3.65%. That has offered stocks some breathing room, though yields remain elevated enough to pose a headwind for risk sentiment.
US jobs report and inflation data in focus
Attention now turns to the US September payrolls report, with economists expecting a gain of 89,000 jobs versus 162,000 prior, unemployment seen holding at 4.1% and hourly earnings up 0.3% month on month. According to ING, markets currently price an October Fed rate hike as more likely than not. Euro zone flash inflation data is also due later Friday, with ING projecting headline inflation at 3.3% and core at 2.5%.
A hotter wage print alongside resilient payrolls could quickly revive the case for another Fed hike and threaten a fresh breakout in yields, which could hurt equities ahead of the weekend.
Banks and individual movers lag
European banking stocks were on track for their worst weekly performance since April, hurt by concerns that higher interest rates could dent the broader economy. Germany's Commerzbank dropped 2% after RBC downgraded the stock to "sector perform" from "outperform." Puma declined 1.2% after US peer Nike projected a steep drop in full-year revenue, citing weak demand in China and heightened competition.
Sources: Investing.com – Stock Market News, InvestingLive, Investing.com – Economy News
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