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European stock markets showed little movement on Friday, as investors awaited the release of U.S. nonfarm payrolls data, a critical factor in shaping Federal Reserve policy expectations for the coming months. Ongoing political shifts in France and South Korea also remained under watch.
Market Highlights:
- STOXX 600: Down 0.04% by 0813 GMT, ending a six-day streak of gains. The index is on track for its strongest weekly performance in ten weeks.
- CAC 40: Gained 0.2%, nearing a three-week high after President Macron pledged to swiftly appoint a new prime minister to prioritize passing the 2025 budget.
Focus on U.S. Payrolls Data
Markets are heavily focused on the upcoming U.S. payrolls data for November, due at 1430 GMT. The data is expected to influence the Federal Reserve’s next move, with traders currently pricing in a 68% likelihood of a rate cut at the central bank’s final meeting of the year.
French Politics in Spotlight
Calm returned to French markets after President Macron’s assurances of quick action to stabilize the government. The priority remains addressing budget approval issues following the collapse of Michel Barnier’s government, which left France at risk of political stagnation.
Stock-Specific Movements
- Direct Line Group: Shares soared 8.5%, driven by news of a potential sweetened £3.61 billion ($4.60 billion) cash-and-stock takeover offer by Aviva, one of Britain’s largest insurers. Direct Line’s board is expected to back the deal if formalized.
Outlook
European markets remain cautiously optimistic, buoyed by potential U.S. rate cuts and easing political tensions in France. However, the trajectory of the Federal Reserve’s monetary policy remains a pivotal driver, with payrolls data expected to provide significant clarity.
Investors will also continue monitoring individual corporate developments, with merger activity offering a potential boost to specific sectors.
