European stocks drop ahead of the US jobs report

European stocks fell on Friday, continuing the heavy losses incurred in the previous session, in the wake of US data that showed that the labor market remains strong, while investors await an important report on US jobs, which is scheduled to be issued later in the day, to search for other clues about expectations about the course of interest rates.

And by 0710 GMT, the pan-European Stoxx 600 index was down 0.4 percent, on track for its worst weekly performance since mid-March. The utilities sector led the losses, as it recorded a decline of 1.2 percent.

The Financial Times 100 Index fell by 0.6 percent.

European stocks fell on Thursday after data showed that US private sector payrolls expanded much more than expected in June, indicating continued labor market strength despite rising recession risks.

The data also led to an increase in US Treasury yields for two years to the highest level in 16 years, and yields for ten-year Treasury bonds in Britain rose to the highest level since 2008.

Investors are awaiting the US Nonfarm Payrolls report, which is due at 1230 GMT. The report is expected to show a decrease in the number of new jobs in the United States in June compared to the previous month.

Shell fell 0.2 percent after Europe’s largest oil and gas company said on Friday it expected second-quarter turnover in its gas unit to be “significantly lower” than in the previous quarter.