European stocks drop at open, before US jobs

European stock markets fell at the open Friday before US jobs data that should offer clues on the pace of future interest rate hikes from the Federal Reserve.

London’s benchmark FTSE 100 index dipped 0.1 percent to 6,989.65 points.

In the eurozone, Frankfurt’s DAX index lost 0.4 percent to 12,419.72 points and the Paris CAC 40 shed 0.2 percent to 5,927.41.

“Equity markets are on course to spend a third day in the red despite a strong start to the week as investors adopt a cautious approach ahead of the US jobs report,” noted Craig Erlam, senior market analyst at OANDA trading group.

Further US interest rate hikes are expected in the coming months to try and cool decades-high inflation.

However, markets are starting to price in a less aggressive pace of rate tightening than seen so far this year, easing fears of a global recession.

“Investors are turning more concerned about the aggressive Fed tightening and are ready to bet that the rate hikes would slow down in the next few meetings,” Swissquote analyst Ipek Ozkardeskaya said Friday.