Europe open: Stoxx lower as investors eye bonds, US jobs data

(Sharecast News) - European shares were slightly lower at the open on Friday as bond market yields remained elevated ahead of US jobs data later in the day. The pan-regional Stoxx 600 index was down 0.05% at 515.60 in early deals having closed at a four-week high on Thursday.

UK bond prices were a key focus having hit their highest levels in decades this week. The yield on 10-year bonds hit its highest level since the 2008 financial crisis in the previous session but was marginally ahead by 2 basis points at 4.82%.

Long-dated 30-year bonds were almost 2bp higher, at 5.38% having hit their highest levels since the late 1990s this week. The pound was down 0.17% against the dollar at $1.2286.

The bond story is similar across the world as borrowing costs rise amid fears that threatened US tariffs by incoming president Donald Trump will fuel global inflation.

Germany's 10-year government bond yield was up 3.5bps at 2.566%, its highest since July 10, with the 2-year yield increasing one bp to 2.23%.

US treasuries were stabilising, although the 10-year yield was up 2bp at 4.7% and on track to close at its highest level in 10 months.

Kathleen Brooks, research director at XTB, said the US December payrolls report was expected to show a sharp reduction in jobs growth at the end of 2024.

"Analysts are expecting a 165k increase in payrolls, this compares to a 227k increase for November. Private sector payrolls are also expected to moderate and grow by 140k, vs 194k in November. The unemployment rate is expected to remain steady at 4.2%, the highest level since August, and average hourly earnings are expected to stay at a 4% annual rate," she said.

"Although jobs growth is expected to moderate, there are still pockets of strength in the labour market that could be inflationary."

In equity news, shares in Danish medical supplies maker Ambu surged after the company on Thursday lifted its full-year outlook.

Ubisoft shares slumped as the French video game publisher on Thursday said it was appointing advisors to review and pursue strategic options on a report last year that its majority backers were considering a buyout.

UK supermarket chain Sainsbury's fell despite a rise in Christmas sales.

Reporting by Frank Prenesti for Sharecast.com