Europe open: Investors tread cautiously ahead of US jobs report, China tariffs

Stocks have begun the session trading slightly higher ahead of the release, later in the session, of the key monthly US jobs report, amid the threat of an escalation in global trade tensions.

Commenting on the situation in stocks just after the opening bell, Mike van Dulken at Accendo Markets said: "Calls for a positive open come in spite of negative trading on Wall St and in Asia, though the Dow was able to eke out slim gains.

"Concerns over Emerging Markets and the another US-China tariff clash are pushing traders towards risk-off sentiment into the weekend. Matter made worse by Trump training his sights on Japan as a potential next trade victim according to the WSJ."

Against that backdrop, as of 0829 BST the benchmark Stoxx 600 was edging higher by 0.10% or 0.36 points to 373.83, alongside a rise of 0.15% or 17.48 points to 11,972.73 for the German Dax.

The FTSE Mibtel meanwhile was up by 0.26% or 53.04 points to 20,579.49.

Nevertheless, the main European equity gauges were on track for their worst week since the end of March, according to Bloomberg data.

To take note of, and also according to Bloomberg, strategists at UBS believed the S&P 500 might drop 5.0% if the US administration opted for 25% tariffs on a further $200.0bn-worth of Chinese goods.

However, they reportedly believed that any decline would be short-lived ahead of the mid-term elections and if the Federal Reserve, as they expected, skipped an interest rate hike in December.

There were reports that the White House would move ahead with a new round of tariffs, possibly as soon as Friday, but the exact magnitude of the levies that were to be imposed was as yet unknown.

The economic data published on Monday was mixed at best.

German industrial production shrank by an outsized 1.1% on the month in July (consensus: 0.2%), according to the country's Ministry of Finance.

A separate report showed that the foreign trade balance in the euro area's largest economy meanwhile declined sharply, slipping from €21.8bn for June in non-seasonally-adjusted terms to €16.5bn in July (consensus: €19.5bn).

Going the other way, French industrial production bounded ahead by 0.7% month-on-month in July (consensus: 0.2%), according to INSEE, with manufacturing sector output up by 0.5%.

Spanish industrial output meantime was ahead by 0.5% on the month (consensus: 0.4%), INE said.

Still ahead for later in the day, at 1330 BST, the US Department of Labor was expected to report that non-farm payrolls grew by 191,000 in August, after increasing by 200,000 in the month before.

Deutsche Bank was under pressure early on, on the heels of a report attributed to Dow Jones that Chinese fund HNA had exited the lender's shareholder register, having reportedly been instructed by Beijing to focus on domestic airlines.

IAG was another notable faller early on, after the airline revealed a data breach affecting 380,000 customers who flew with the airline between 21 August to 5 September.