European stocks and Wall Street futures drifted higher on Friday after eurozone inflation fell more than expected in December and US job growth exceeded Wall Street forecasts.
Contracts tracking Wall Street’s benchmark S&P 500 rose 0.4 per cent while those tracking the tech-heavy Nasdaq 100 rose 0.2 per cent ahead of the New York open.
The US economy added 223,000 jobs in December compared with 256,000 the previous month, according to the labour department. The unemployment rate slipped to 3.5 per cent from a downwardly revised 3.6 per cent. Wall Street economists had expected the world’s largest economy to tack on 200,000 new jobs last month and for the jobless rate to hold steady at an initially reported 3.7 per cent.
US equities sold off in the previous session after a report from payroll processor ADP exceeded forecasts.
“Signs of strength in the US labour market are understandably being read as prolonging both the Fed’s concern with tight labour markets and its preoccupation with suppressing inflation,” said Chris Turner, global head of markets at ING.
Elsewhere, the regional Stoxx Europe 600 added 0.4 per cent, London’s FTSE 100 gained 0.5 per cent and France’s Cac 40 rose 0.2 per cent. Germany’s Dax edged up 0.2 per cent.
The muted moves in European equity markets came after the flash index of consumer prices across the eurozone fell to 9.2 per cent in December from 10.1 per cent in November. Economists polled by Bloomberg had expected a 9.5 per cent year-on-year rise. Core inflation, which strips out volatile food and energy prices, rose to 5.2 per cent from 5 per cent in November.
Data published earlier this week showed price pressures eased by more than expected in Germany, France and Spain towards the end of 2022, easing pressure on the European Central Bank to maintain its aggressive stance on inflation.
