European stocks and Wall Street futures wavered on Friday, as investors watching for signals of the future path of interest rates cautiously awaited the release of December’s eurozone inflation figures and a crucial US jobs report.
The regional Stoxx Europe 600 traded flat while London’s FTSE 100 gained 0.2 per cent. Contracts tracking Wall Street’s benchmark S&P 500 dipped slightly while those tracking the tech-heavy Nasdaq 100 slipped 0.2 per cent ahead of the New York open.
US equities sold off in the previous session after private sector employment in the world’s biggest economy rose by 235,000 in December, ahead of estimates, according to payroll processor ADP. Figures from the Bureau of Labor Statistics later on Friday are expected to add further weight to the Federal Reserve’s arguments that the jobs market remains too tight to justify lower borrowing costs.
Economists polled by Refinitiv expect the US to have added 200,000 jobs in December, down from 263,000 in November and 261,000 in October. The unemployment rate is expected to remain unchanged at 3.7 per cent, near the pre-pandemic low.
“Signs of strength in the US labour market are understandably being read as prolonging both the Fed’s concern with tight labour markets and its preoccupation with suppressing inflation,” said Chris Turner, global head of markets at ING.
Across the Atlantic, eurozone inflation is expected to have fallen to 9.5 per cent in December, down from 10.1 per cent in November, according to economists polled by Bloomberg. Data published earlier this week showed price pressures eased by more than expected in Germany, France and Spain towards the end of 2022.
