FX.co ★ European Stocks Close Lower As Investors Move Past ECB Rate Cut, Digest U.S. Jobs Data

European stocks closed lower on Friday as optimism waned regarding an interest rate cut by the European Central Bank, compounded by diminishing expectations for an imminent rate cut from the Federal Reserve. This follows data revealing unexpectedly robust growth in U.S. non-farm payroll employment for May.

The pan-European Stoxx 600 index ended down 0.22%. The U.K.'s FTSE 100 and France's CAC 40 both dropped 0.48%, and Germany's DAX fell 0.51%, while Switzerland's SMI edged up 0.11%.

Elsewhere in Europe, markets in Austria, Belgium, Finland, Poland, Portugal, Spain, and Turkey ended in the red. Denmark, Greece, Iceland, Norway, Russia, and Sweden also saw declines, whereas the Netherlands closed flat.

Notable declines included Fresnillo, which plunged approximately 5.7%. Prudential, ICG, Persimmon, Antofagasta, Kingfisher, Segro, Howden Joinery, Rentokil Initial, Experian, EasyJet, Unite Group, and JD Sports Fashion lost between 2% and 4.1%.

Conversely, Compass Group, Pearson, Diploma, Whitbread, IMI, Weir Group, National Grid, and Convatec Group registered gains.

In Germany, Vonovia tumbled more than 7%, Daimler Truck Holding ended down 4.2%, and Zalando fell roughly 3%. Sartorius, RWE, E.ON, Bayer, and Mercedes Benz also closed notably lower. However, Infineon rallied nearly 4%, while Covestro advanced about 2.5%, and Commerzbank, Beiersdorf, and Rheinmetall recorded gains of 1.2% to 2%.

In France, Orange dropped approximately 4%. Engie, Vinci, Airbus Group, Bouygues, Veolia, Vivendi, Pernod Ricard, Dassault Systemes, Renault, Unibail Rodamco, Saint-Gobain, and Safran fell between 1% and 3%.

On the economic front, Eurostat's latest data revealed that the euro area economy expanded as initially estimated in the first quarter, driven by household consumption and exports. The seasonally adjusted GDP grew 0.3% from the previous quarter, which had seen a 0.1% decline. Year-on-year, GDP increased by 0.4%, following a revised 0.2% growth in the prior three months.

Germany’s export and import growth accelerated in April, according to Destatis. Exports rose 1.6% month-on-month after a revised 1.1% increase in March, exceeding the forecast of 1.1%. Imports grew 2%, up from 0.5% in March, surpassing economists' 0.6% forecast. Consequently, the trade surplus slightly dipped to EUR 22.1 billion from EUR 22.2 billion in the previous month. German industrial production declined 0.1% month-on-month in April, following a 0.4% dip in March, against economists' expectations of a 0.3% gain. Year-on-year, industrial production fell 3.9%, easing from a 4.3% decline in March.

France's trade deficit widened in April as imports increased amid falling exports. The deficit rose to EUR 7.6 billion from EUR 5.4 billion in March, against an expected shortfall of EUR 5.4 billion; it was EUR 9.9 billion in the same period last year.

In the U.K., data from the mortgage lender Halifax showed a 0.1% month-on-month decline in house prices for May, defying expectations for a 0.2% increase, following a flat performance in April.

In the U.S., the Labor Department reported a surge of 272,000 jobs in non-farm payroll employment for May, after a downwardly revised increase of 165,000 jobs in April. Economists had anticipated a rise of around 185,000 jobs compared to the previously reported addition of 175,000 jobs for April. The report also highlighted an acceleration in the annual rate of average hourly earnings growth to 4.1% in May from 4% in April. Meanwhile, the unemployment rate inched up to 4% in May from 3.9% in April.