Europe midday: Stocks waver as investors look to payrolls

European stocks wavered in a tight range, with investors opting for caution following disappointing German data and ahead of the all-important non-farm payrolls report.

At midday, the benchmark Stoxx Europe 600 index and Germany’s DAX were down 0.2%, while France’s CAC 40 was up 0.2%.

“Much weaker than expected German factory orders clearly highlight that slowing global growth especially in China but also increasingly in the US is starting to impact Europe's largest economy in a negative way,” said Markus Huber, senior analyst at Peregrine & Black.

“The main focus today will be on US non-farm payrolls. After a very strong reading for December traders are expecting that job growth will moderate somewhat but still show healthy overall growth. Specifically for stocks with the Fed unlikely to raise rates again soon anyway and global growth concerns spooking markets a strong job reading is most likely the preferred scenario for stocks today. However a weak reading will cause some additional pain to an already fragile stock market with new lows of the year likely.”

Consensus expectations are for payrolls to show a rise of 190,000, compared with 292,000 the previous month.

Figures released earlier by Destatis showed German manufacturing orders fell more than expected in December.

Orders were down 0.7% compared with a 1.5% increase in November and steeper than the 0.5% drop expected by economists.

On the year, manufacturing orders were down 2.7%.

Domestic orders decreased 2.5% while foreign orders slipped 0.6% on the previous month.

New orders from the euro area were down 6.9% from November and orders from other countries increased 5.5%.

Pantheon Macroeconomics said the figures were poor but the jump in export orders was upbeat.

“A disappointing headline, indicating German manufacturing continues to struggle,” it said.

Still to come, payrolls are at 1330 GMT, along with the unemployment rate and trade balance figures.

Oil prices were mixed, with West Texas Intermediate up 0.2% at $31.78 a barrel and Brent crude down 0.1% at $34.42.

In corporate news, BG shares rose after the oil and gas company posted a drop in full year profit but a rise in production.

French lender BNP Paribas rallied. Although the company posted a big drop in fourth quarter earnings, investors appeared to be welcoming plans to overhaul the investment bank and cut costs.

ArcelorMittal tumbled after the steelmaker announced a large fourth quarter loss and said it will issue $3bn of shares to strengthen its balance sheet.