Europe midday: Stocks come off lows ahead of US jobs report
Stocks are off their lows of the session ahead of the release of the monthly US jobs report, with investors seemingly taking unexpected announcements from the US administration on the White House's tariff plans and on North Korea in their stride.
Against that backdrop, as of 1156 GMT the benchmark Stoxx 600 was edging higher by 0.05% or 0.17 points to 376.82, alongside a fall of 0.44% or 54.24 points in the German Dax to 12,302.57 while the Cac-40 was ahead by a minor 0.03% or 1.58 points to 5,254.85.
Meanwhile, euro/dollar was 0.17% lower to 1.2294, while the yield on the German 10-year Bund was retreating was bouncing back by two basis points and at 0.65%, following the prior session's sharp drop after the European Central Bank sounded a more dovish than expected note.
"Equities are flattish as investors adopt their usual wait-and-see approach ahead of the 1.30pm US jobs report. However, focus will be less on jobs and more on wage growth (forecast a shade slower in Feb) because it was a Jan jump in this metric which fuelled the Feb sell-off amid concerns that the Fed might over-tighten policy in anticipation of inflation, risking the economic recovery. Traders are also digesting US trade tariffs (DAX under-performing due to no news on EU exemption), China inflation and the potential for a welcome North Korean nuclear detente," said Mike van Dulken at Accendo Markets.
Nevertheless, at first glance the US president's tariff plans did appear to leave room for the country's allies to be at least partly exempted - a relative positive - although markets were still closely watching for other countries' reactions.
No announcement on tariffs had been expected for Thursday night.
"Moving on, the trade conflict is highly likely to be the source of bouts of market volatility in the near future. Admittedly, when Mr. Trump signed the tariff order late yesterday, [fixed income] markets showed virtually no reaction. It now depends on how other countries, particularly China and the EU, respond to the US tariffs," said analysts at Unicredit Research.
Also overnight, and breaking with decades of tradition in foreign policy, president Trump agreed to meet North Korean dictator Kim Jong Un. Analysts generally greeted the news, but cautioned that Pyongyang might have gained "respectability" in exchange for very little.
Economic data was on the soft side at the end of the week.
French industrial production fell back sharply in January, falling by 2.0% against December, with declines see across all the main categories, led by falls in Mining and Construction output of 6.7% and 7.6%, respectively, INSEE said.
Spanish industrial production was also weaker, shrinking by an outsized 2.6% during the same month (consensus: 0.1%) as energy ouput fell back by an outsized 7.5%, although production of capital goods also weakened, falling by 2.3%, according to INE.
German industrial production undershot forecasts as well, with the country's Ministry of Finance reporting a dip of 0.1% month-on-month (consensus: 0.5%).
Looming large on the economic calendar for later in the day was the US non-farm payrolls report for the month February, which was scheduled for release at 1330 GMT.
In the corporate space, Airbus was again making headlines, with Bloomberg reporting that India's largest carrier, IndiGo, might be set to purchase up to 50 SE A330 wide-body jets from the Leiden, Netherlands-based manufacturer.
Further South, according to analysts at Banco Sabadell, Telefonica could generate €8.4bn by selling its German arm, which would help to accelerate its attempts delever its balance sheet.
Banco Sabadell stuck to a 'buy' recommendation for the shares.