Europe open: Stocks edge lower ahead of non-farm payrolls

At 0850 GMT, the benchmark Stoxx Europe 600 index was down 0.6%, France’s CAC 40 was down 0.4% and Germany’s DAX was 0.5% weaker.

“There was always the possibility that expectations surrounding yesterday’s ECB meeting were going to be extremely difficult to fulfil and investors paid the price of an ECB president who over promised in his recent rhetoric and under-delivered,” said Michael Hewson, chief market analyst at CMC Markets.

“A deposit rate cut of 0.1% to -0.3% was always going to disappoint and the failure to expand the monthly amount only served to highlight that the ECB was scraping the barrel of top quality assets to buy.”

He added that the decision to expand the pool of assets available to buy local government debt only reinforces that perception but in reality was probably the only option available to policymakers if they wanted to stretch out the duration of the programme until March 2017 to the tune of €60bn a month.

On Thursday, Fed chairwoman Janet Yellen said in testimony before Congress that economic data show conditions are strong enough to withstand a rate hike later this month.

With that in mind, investors will be eyeing the all-important non-farm payrolls report for November which is due at 1330 GMT, along with the unemployment rate and trade balance figures for October.

“Last month’s report was exceptional and far beyond what is required to warrant a hike,” said Craig Erlam, senior market analyst at Oanda.

“Unless we see a substantial downward revision to the October numbers, I find it difficult to envisage a report today that could make Fed officials question the decision to hike this month. While the markets would probably respond very negatively to a non-farm payrolls number of around 100,000, I don’t think even this would be enough to deter Fed officials so the bar really is very low.”

Data released earlier by Destatis showed Germany’s factory orders for October beat expectations.

Factory orders gained 1.8% month-on-month in October, snapping a three-month losing streak and exceeding expectations for orders to grow 1.2% in the period after an upwardly revised 0.7% fall in August.

Corporate news flow was scarce on Friday.

Berkeley Group surged in London after raising its dividend despite a drop in first half profit.

Sandvik slid after JP Morgan downgraded the stock to ‘underweight’ from ‘neutral’ and cut its target price.

Costa Coffee and Premier Inn owner Whitbread was also under the cosh after Barclays downgraded it to ‘equalweight’ from ‘overweight’.