Europe midday: Stocks drop as attention shifts to payrolls report

European stocks pushed lower on Friday as investors took some money off the table ahead of the non-farm payrolls report, which could provide further clues on the timing of the next Federal Reserve rate hike.

At midday, the benchmark Stoxx Europe 600 index was down 0.9%, Germany’s DAX was off 0.8% and France’s CAC was 1.2% lower.

At the same time, oil prices were in the red as worries about a supply glut resurfaced, despite the wildfires in Canada.

West Texas Intermediate was down 0.7% to $44.02 a barrel and Brent crude was 0.8% lower at $44.66.

“The main focus today will be on US employment data this afternoon. Even with the Fed appearing very eager to give the impression that the economy is doing well and that more rate hikes are in the offing sooner rather than later, recent economic data has been showing a mixed picture at best,” said Markus Huber, a trader at City of London Markets.

“Consequently only a much stronger than expected non-farm payroll number is likely to spook markets. However with overall sentiment distinctly negative and China releasing important trade figures over the weekend it wouldn't come as too much of a surprise if stocks finish the trading week on a negative to cautious note.”

The payrolls report is due at 1330 BST, along with the unemployment rate.

Consensus expectations are for an increase of just over 200,000, although RBC Capital Markets said this has been downgraded a touch to 190,000 in the law few days.

However, the Canadian bank has not adjusted its slightly-above consensus call of 210,000, while Societe Generale expects an improvement of around 228,000.

Deutsche Bank was less optimistic, forecasting a 175,000 gain.

In corporate news, ArcelorMittal shares slid after the steel giant reported a 33% drop in first-quarter profit amid falling prices.

Rio Tinto was in the red as the miner said it and its partners, the Mongolian government and Turquoise Hill Resources, have approved the next stage of development on the Oyu Tolgoi copper and gold mine.

InterContinental Hotels edged lower after it reported a slowdown in growth in the first quarter as weak oil markets and an earlier Easter hit Europe and the Americas.

EasyJet flew lower after it posted a rise in April passenger numbers but a drop in the load factor.

Man Group tumbled after Citigroup cut its stance on the stock to ‘sell’ from ‘buy’ , saying the shares were fully valued.