European Shares

Stocks in Europe extended the uncertain trend registered overnight in Asia, drifting slightly lower, as investors brace for today’s highly awaited US job report.

This week’s optimistic tone brought by Fed chairman, Jerome Powell’s, less aggressive stance as well as the prospect of an economic reopening in China, is being tempered on Friday as investors were tempted to take some profit out following yesterday’s disappointing manufacturing data, and ahead of the US NFP data release.  Today’s job report will be crucial as it should provide investors with more hints on whether the Fed can really slow the pace of future rate hikes, or not. Today’s number is expected to show less job creation than the month before with 200K vs 261K in October, and any figure outside of that range should significantly impact market sentiment for the end of the year. The wait-and-see trading stance prevails so far on stocks, and investors know they will need further evidence of an increased probability of a soft landing in the US, before sending equities to new highs.

The worst performance comes from London this morning, as the FTSE-100 is currently testing its short-term dynamic bullish trendline above 7,500.0pts. A rebound over this zone should quickly send the market higher towards 7,615.0pts, 7,650.0pts and even 7,700.0pts by extension, while a break-out of the trendline could lead prices lower around 7,500.0pts and 7,400.0pts in the very short-term.

Pierre Veyret– Technical analyst, ActivTrades 

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