European stocks trade lower as investors digest inflation data, await U.S. jobs numbers – CNBC

LONDON — European stocks were lower on Friday as investors digest euro zone inflation data and awaited key jobs numbers out of the U.S.

The pan-European Stoxx 600 was down 0.3% in late morning deals.

It comes after inflation in the euro zone hit a new record high in December, raising more questions about the European Central Bank‘s policy.

Preliminary data showed Friday that headline inflation came in at 5% for the month, compared to the same month last year. The figure represents the highest ever on record and follows November’s all-time high of 4.9%.

Travel and leisure was the worst performing sector, down by 1.5%. Basic resources, on the other hand, was the top gainer.

Looking at individual stocks, ST Micro was among the best performing, up by 5.6%, after reporting higher-than-expected sales in the fourth quarter.

Deutsche Bank was also in the spotlight on Friday after positive statements that the bank is on track to hit key profit targets, Reuters reported.

In other stock news, Air France – KLM will need to raise fresh capital in 2022 of between 1 and 2 billion euros ($1.13 billion and $2.26 billion), Les Echos reported.

Investors will now be closely watching new jobs data out of the U.S., due at 8:30 a.m. ET / 13:30 GMT.

It comes after minutes from the Fed’s December meeting revealed Thursday a hawkish stance within the central bank. Officials said they are ready to not only increase rates and reduce bond buying, but also to have conversations about lower holdings of Treasurys and mortgage-backed securities.

The news sparked a sell-off in many markets around the world.

Economists have estimated that the U.S. economy added 422,000 jobs in December, according to data compiled by Dow Jones. The unemployment rate, due at the same time, is expected to come in at 4.1%.

Back in Europe, investors are taking in new trade data from Germany.

Germany’s trade surplus dropped to its smallest level in November since 2011, according to Reuters. In addition, industrial production also fell 0.2% month-on-month.

“Supply chain frictions are keeping German industry in a stranglehold. Only exports are sending some glimmers of hope. However without production, the export revival will also be short-lived,” Carsten Brzeski, global head of macro at ING, said in a note.

On the political front, foreign affairs minister of the North Atlantic Treaty Organization (NATO) are gathering virtually Friday to discuss Russia’s troop build-up near Ukraine. Their meeting precedes high-level talks between Russia, the U.S. and NATO next week.