European equities moved modestly higher on Friday, although gains were capped as investors remained cautious ahead of the release of crucial U.S. jobs data that could influence expectations for Federal Reserve monetary policy in 2026.
By 03:05 ET (08:05 GMT), Germany’s DAX was up 0.1%, France’s CAC 40 climbed 0.5%, and the UK’s FTSE 100 added 0.3%.
Payrolls in Focus as Fed Outlook Uncertain
Market attention across Europe and beyond was firmly fixed on the U.S. nonfarm payrolls report due later in the session. The data is expected to offer clearer insight into the strength of the U.S. economy and the future direction of Federal Reserve policy.
Economists anticipate a slowdown in job creation, with forecasts pointing to around 57,000 new roles added in the final month of 2025, compared with 64,000 in November. While the labor market is expected to show signs of weakness, it is not seen as deteriorating sharply.
The Fed lowered interest rates at its final three meetings of 2025, prioritizing concerns about a cooling labor market over persistent inflation pressures. However, policymakers are widely expected to keep rates unchanged later this month, with uncertainty growing over how aggressively rates may be cut over the remainder of the year.
European Data and Retail Sales Ahead
Back in Europe, German industrial production surprised to the upside, rising 0.8% month on month in November instead of the forecast 0.6% decline. The data suggested Europe’s largest economy may be showing early signs of recovery toward the end of the year.
Eurozone retail sales figures for November are due later in the day and are expected to confirm that consumer demand across the bloc remains under strain.
Tariff Ruling and Greenland in Spotlight
Political developments were also closely watched. Greenland remained in focus after the head of mining company Amaroq indicated that the U.S. is considering investments in critical minerals projects on the island.
The comments come ahead of discussions between Washington and Danish officials, as President Donald Trump continues to stress Greenland’s importance to U.S. national security.
Investors are also awaiting a potential ruling from the Supreme Court of the United States on the legality of the Trump administration’s global tariffs. A decision could come as early as Friday and may determine whether the International Emergency Economic Powers Act of 1977 provided the authority to impose the duties.
An adverse ruling could throw uncertainty over roughly $150 billion in tariffs already paid by importers.
Mining Sector in Focus After Merger Talks
Corporate attention centered on the mining sector after Glencore confirmed it is in early-stage discussions over a potential acquisition by Rio Tinto. A deal would create the world’s largest mining group.
Rio Tinto, the world’s biggest iron ore producer, has a market value of about $142 billion, while Glencore is valued at roughly $65 billion.
Analysts said cultural differences could be a key challenge, given Glencore’s trading-driven, opportunistic approach compared with Rio Tinto’s more traditional mining focus.
Elsewhere, UK grocer J Sainsbury raised its outlook, saying it now expects retail free cash flow to exceed £550 million this financial year after strong Christmas grocery sales. Rivals Tesco and Marks and Spencer also reported robust holiday food sales.
Oil Prices Rise on Supply Concerns
Oil prices advanced on Friday and were on track for another weekly gain, as geopolitical developments in Venezuela and Iran raised concerns over global supply.
Brent crude futures climbed 0.8% to $62.47 a barrel, while U.S. West Texas Intermediate rose 0.8% to $58.21 a barrel. Both benchmarks surged more than 3% on Thursday and were set for weekly gains of around 2%, marking a third consecutive weekly rise.
Unrest in Iran, a major Middle Eastern producer, added to supply worries following the Trump administration’s seizure of Venezuelan President Nicolas Maduro last week and claims that the U.S. will take control of Venezuela’s oil sector.
