Market Analysis

European stock markets edged lower on Thursday, trading in a cautious manner ahead of the important US jobs report, with renewed worries about the outlook for the world's largest economy.

By 03:05 ET (07:05 GMT), Germany's DAX index was flat, France's CAC 40 declined by 0.4%, and the UK's FTSE 100 fell by 0.1%.

Market Sentiment Remains Fragile

European indices moved within a narrow range, with market sentiment remaining fragile ahead of Friday's crucial US nonfarm payrolls report. Investors are seeking hints on how aggressively the Federal Reserve might cut interest rates later this month.

Fed Chair Jerome Powell has indicated it is time to begin reducing interest rates, with many market participants expecting a 25-basis point cut at the September 17-18 meeting.

Earlier in the week, weak US manufacturing data heightened concerns about the economic outlook, while a larger-than-expected drop in job openings suggested a potential sharper weakening in the labor market.

The JOLTS report “adds to the body of evidence that the labor market is not only looser than pre-pandemic but is continuing to cool, potentially at a faster pace,” noted Citi analysts.

The monthly jobs report due on Friday is anticipated to reveal around 164,000 new jobs and a 4.2% unemployment rate for August.

Eurozone Retail Sales Expected

In Europe, German industrial orders increased by 2.9% in July compared to the previous month, surpassing the expected 1.6% decline and following a revised 4.6% growth in the prior month.

This positive data comes amid weaker manufacturing activity reported earlier this week. Eurozone retail sales figures for July, expected later today, are projected to show a slight improvement after a 0.3% drop in the previous month.

The European Central Bank cut interest rates in June and is anticipated to lower them again later this month.

Corporate Updates

In the corporate sector, Volvo (ST) shares rose 0.2% after the Swedish automaker revised its adjusted profitability target for 2026 and set a new goal to outgrow the premium car market, abandoning its previous sales target.

Burberry (LON) shares increased by 0.8% following its removal from the FTSE 100 index to the FTSE 250 during September's quarterly rebalancing. The shift came amid declining sales and multiple management changes impacting the retailer.

Crude Oil Prices Edge Higher

Crude oil prices ticked up on Thursday, recovering slightly after hitting multi-month lows. Reports suggest major producers might delay an output increase, combined with a drawdown in US inventories.

By 03:05 ET, the Brent crude contract rose 0.3% to $72.89 per barrel, recovering from the lowest close since June 27, 2023. US crude futures (WTI) increased by 0.3% to $69.39 per barrel, after falling to the lowest settlement since December 11.

Support came from American Petroleum Institute data, which revealed a 7.431 million barrel draw in US crude oil inventories last week, exceeding the expected 1 million barrel draw.

OPEC+ (the Organization of the Petroleum Exporting Countries and allies including Russia) is reportedly considering delaying its planned oil output increase set to begin in October, according to Reuters.

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