Europe midday: Stocks flat as investors eye Yellen speech

European stocks were little changed on Monday as investors awaited a speech by Federal Reserve chair Janet Yellen for further clues on monetary policy after Friday’s dire payrolls report.

At midday, the benchmark Stoxx Europe 600 index and Germany’s DAX were both flat, and France’s CAC 40 was 0.1% weaker.

At the same time, oil prices rose, underpinned by attacks on Nigerian oil infrastructure. West Texas Intermediate was up 1% to $49.12 a barrel and Brent crude was up 1.1% at $50.15.

Yellen is due to give a speech on the economic outlook and monetary policy at the World Affairs Council of Philadelphia’s luncheon at 1730 BST.

“If the Fed Chair had hoped for a relaxing weekend away, Friday’s data must have put paid to that with today’s scheduled speech requiring more than a gentle redraft,” said Mike van Dulken, head of research at Accendo Markets.

“Markets will be expecting hear a tempering of recent hawkishness about a summer rate rise being ‘possible’. A rate rise is always possible, but it really would be a surprise for markets that have already reversed their bets.”

Meanwhile, Societe Generale said: “Coming off last Friday’s employment report, Chair Yellen probably had some tweaking to do to Monday’s speech. The positive momentum seemed to quickly evaporate after a lowly 38K nonfarm payrolls print and a slowdown to the 3-mo average of payrolls to 116K from the 212K pace seen as recently as February.

“Given the Fed’s rhetoric about being data dependent, it seems that plans for a summer hike could be delayed. We will closely monitor Chair Yellen’s comments about the May employment report, as well as any comments regarding how she views global and financial risks now as compared to her dovish speech in late March. “

Ahead of Yellen’s speech, investors mulled over comments from Boston Fed President Eric Rosengren speaking in Finland. He said a rate hike was still likely, albeit not this month, despite the weak jobs report. Rosengren said it was important to wait and see whether the payrolls report was a reflection of a broader slowing in labour markets or just an anomaly.

In terms of sector, basic resources racked up healthy gains amid stronger metals prices, with the Stoxx 600 sub-index for the sector up 3.9%. Mining stocks pushed higher despite the dollar regaining ground against major rivals as the pound was weighed down by Brexit polls showing growing support for the Leave campaign and the yen slipped as Japanese officials talked the currency down.

Among individual stocks, Vodafone edged up after announcing the formation of a non-equity partnership in Zambia with Afrimax Group.

EasyJet was a little weaker, however, after reporting a 5.7% jump in passenger numbers in May despite 173 cancellations due to French air traffic control strikes and weather conditions.

Earlier, data released by Destatis showed manufacturing orders in Germany fell much more than expected in April.

Factory orders slumped 2% in April from the previous month, which was a much steeper drop than the 0.6% economists had been expecting

However, the figures for March were revised to show a 2.6% increase, up from the 1.9% initial reported.

On the year, manufacturing orders were down 0.5%.