European stocks fell on Friday after a stronger-than-expected U.S. jobs report raised bets that the Federal Reserve will raise interest rates by 75 basis points again next month, but fears over the growth caused weekly losses.
* The pan-European STOXX 600 index fell 0.8%, extending losses posted earlier in the day, after a 528,000 job gain in US non-farm payrolls was reported last month, the biggest gain since February.
* The benchmark index has lost 0.6% this week, after two more gains, on concerns about gloomy economic data in the region, heightened geopolitical tension and fears that rate hikes of interest could cause a recession.
* “The data released this week adds to the evidence that a recession is just around the corner,” said Jack Allen-Reynolds, senior Europe economist at Capital Economics.
* Figures this week also showed that euro zone retail sales slumped in June and factory prices continued to rise, while business activity contracted in July for the first time since early last year.
* “Forward-looking indicators suggest that the worst is yet to come (…) If we are correct, the European Central Bank will raise interest rates more aggressively than the market is currently assuming, and the economy will not will meet the consensus forecasts”.
* Euro zone government bond yields rose, with 10-year German bond yields rising 9 basis points to 0.89%.
* Miners rose the most, up 1.1%, following rising prices for copper and other base metals as investors focused on low inventories and supply threats.