Europe midday: Drop is US jobless rate pushes stocks into the red
Stocks have been pushed into the red by US data showing a big drop in the country's unemployment rate alongside a big acceleration in the pace of wage gains which has sent government debt yields higher on both sides of the Atlantic.
As of 1415 BST, the benchmark Stoxx 600 was down by 1.23 points to 389.80 alongside a dip of 8,71 points in the German Dax to 12,958.87.
That followed an unexpected two tenth of a percentage point drop in the US unemployment rate to 4.2% (consensus: 4.4%), while average hourly earnings leapt by 0.5% on the month (consensus: 0.3%).
Some economists pointed to a sharp drop in leisure and hospitaly jobs Stateside as a reason for the strong print on wages, but fixed income markets reacted poorly nevertheless.
Thus, the yield on the benchmark 10-year German bund was four basis points higher to 0.50%.
In Spain, the top flight Ibex 35 was down by 0.21% to 10,193.70 - albeit well off its lows of the session - amid news that several large listed firms including Gas Natural, Abertis and Dogi were set to follow in the footsteps of CaixaBank and Banco Sabadell and redomicile outside of Catalonia.
Acting as a backdrop, on Thursday, and at the behest of Catalonia's Socialist party, Spain's Constitutional Court prohibited a plenary session of the Catalan parliament in which it was expected that regional officials might make a unilateral declaration of independence.
Nevertheless, some reports indicated that the region's leaders would still try to forge ahead.
Separately, other reports appeared to indicate that the more moderate nationalists within the Catalan government might be seeking to stall a unilateral declaration of independence, although the more skeptical observers believed it was just an attempt to try and gain legitimacy by provoking foreign mediation between the government in Madrid and regional officials.
On the other side of the argument, Michael Hewson, chief market analyst CMC Markets said: "Despite the splits amongst Catalan lawmakers the language of government officials in Madrid doesn’t make any sort of negotiated settlement in the near term particularly likely.
"The sort of inflammatory language used by Spanish finance minister De Guindos in calling Catalan officials "insane" is hardly conducive to encouraging moderate voices to come forward, and prevent a damaging schism. It wouldn't hurt politicians in Madrid to indulge in some velvet glove politics as opposed to the sledgehammer approach, which proved so damaging last weekend."
In other economic news, new factory orders in Germany shot higher by 3.6% in August when compared with the month before, according to the Ministry of Finance, led by a 7.7% jump in orders from outside the euro area.
Still on the economic calendar for later in the day, credit rating agencies DBRS and Moody's were expected to release their latest assessments for Spain and Italy after the close of trading.
Three Fed speakers were also still scheduled to speak on Friday evening, including the president of the Atlanta Fed, Raphael Bostic, at 14:15 BST, followed by his peers at the New York and Dallas Fed banks at 17:15 and 1800 BST, respectively.
"We expect markets to look mainly at average hourly earnings and not so much non-farm payrolls. This is also what the Fed signalled at the latest meeting, as the statement explicitly said that the Fed will look through short-term weakness due to hurricanes," said analysts at Danske Bank.
On the corporate front, low cost airline easyJet guided towards full-year earnings before tax of between £405 to £410m, down from £495m one year earlier.