Europe midday: Markets flat as investors show caution ahead of US data

European stocks were swinging between gains and losses on Monday as investor risk appetite was scaled back with markets trading at their highest in four months.

After struggling for direction for most of the morning session, the Stoxx 600 index was flat by lunchtime on Friday's close at 466.20, its highest finish since the start of August.

London's FTSE 100 was down 0.3%, the Cac in Paris and FTSE MIB in Milan were both down 0.1%, while Frankfurt's Dax rose 0.1% and the Ibex in Madrid gained 0.3%.

Investors were choosing to play it safe ahead of some important labour-market data from the US later in the week, including the job openings and turnover survey on Tuesday, the ADP employment report on Wednesday and the closely watched non-farm payrolls figure on Friday.

“Any sharp increase in unemployment rates will be watched like a hawk by investors who are searching for clues as to whether the Federal Reserve has reason to start cutting rates," said Russ Mould, investment director at AJ Bell. "Nervousness about the outlook for the US economy is growing and every data point is being scrutinised for clues as to how the central bank might be thinking."

Economic data on Monday was relatively thin on the ground, with German trade figures and the Sentix investor confidence index the only major releases.

Germany's trade surplus widened more than expected in October. The trade balance stood at €17.8bn, up from €16.7bn in September and ahead of the €17.0bn forecast, as imports fell 1.2% and exports declined just 0.2%. Meanwhile, the Sentix Investor Confidence Index rose to -16.8, from -18.6 in November. This came in below the -14.4 expected by analysts, but was still the highest reading since May.

In other news, gold prices hit record highs on Monday, pushing past $2,100 an ounce amid expectations of rate cuts. The yellow metal reached as high as $2,135 per ounce in Asian trading, before easing back, which has been attributed to rising hopes that the Federal Reserve and European Central Bank may move to cut interest rates sooner than expected.

Analysts at Tickmill Group said the spike in gold can be attributed to the stark shift in central bank expectations. "The Fed and the ECB are now both seen cutting rates early next year," it said.

Miners slip in London

Mining stocks were providing a drag on London's FTSE 100, with Anglo American, Rio Tinto, Glencore and Antofagasta pulling back.

Meanwhile, oil stocks Shell, BP, Repsol and TotalEnergies were firmly lower as Brent crude fell 1.2% to $77.96 a barrel.

However, Rolls-Royce and DS Smith were leading the risers on the back of broker upgrades. Rolls-Royce and DS Smith were raised to 'overweight' by JP Morgan and Barclays, respectively,

888 Holdings was another high riser, jumping 18% after reportedly rejecting a £700m takeover approach by Playtech.