European equity markets traded modestly higher on Friday, with investors cautious ahead of closely watched US employment figures that could influence expectations for Federal Reserve policy in 2026.
By 08:05 GMT, Germany’s DAX was up 0.1%, France’s CAC 40 had added 0.5%, and the UK’s FTSE 100 was 0.3% higher.
Payrolls in focus for Fed outlook
Attention in Europe, and globally, was centred on the upcoming US nonfarm payrolls report, due later in the day, which is expected to offer fresh insight into the momentum of the world’s largest economy and the future direction of Federal Reserve monetary policy.
Economists anticipate a cooling but resilient labour market, with forecasts pointing to around 57,000 jobs added in the final month of 2025, compared with 64,000 in November.
The Federal Reserve lowered interest rates at each of its final three meetings in 2025, prioritising concerns over a softening labour market despite persistent inflation pressures. Markets now largely expect policymakers to leave rates unchanged later this month, though uncertainty remains high around the scale and timing of any further cuts this year as divisions among officials persist.
In Europe, data showed German industrial production rose 0.8% month on month in November, defying expectations for a 0.6% decline and offering tentative signs of a year-end recovery in the euro zone’s largest economy. Eurozone retail sales figures for November are due later, with analysts expecting continued pressure on household spending.
Tariff ruling and geopolitics in view
Political developments were also on investors’ radar. Greenland’s future remained in focus after the chief executive of mining company Amaroq said the US was considering investments in critical minerals projects on the island. The comments come ahead of discussions between Washington and Danish officials, as US President Donald Trump continues to stress Greenland’s strategic importance for national security.
Markets are also watching for a potential Supreme Court decision on the legality of the Trump administration’s global tariffs, which could be delivered as early as Friday. The court may rule that the International Emergency Economic Powers Act of 1977 did not authorise the levies, potentially casting doubt over roughly $150 billion in duties already paid by importers.
Mining sector draws attention
In corporate news, the mining sector was firmly in the spotlight after Glencore (LSE:GLEN) confirmed late Thursday that it is in preliminary talks over a possible acquisition by Rio Tinto (LSE:RIO)—a deal that could create the world’s largest mining company.
Rio Tinto, the world’s biggest iron ore producer, has a market value of about $142 billion, compared with Glencore’s roughly $65 billion at the previous close.
“It makes sense if terms are right for both,” said Argo Investments senior portfolio manager Andy Forster. ” The biggest question mark would be the culture of the two companies as Glencore clearly has a trading background, is very opportunistic and results-focused, some of those aspects of their culture could actually be good for Rio.”
Elsewhere, J Sainsbury plc (LSE:SBRY) said it now expects retail free cash flow of more than £550 million for the current financial year, upgrading its outlook after strong grocery-led trading over the Christmas period. Rivals Tesco (LSE:TSCO) and Marks and Spencer (LSE:MKS) also reported robust Christmas food sales on Thursday.
Oil prices head for weekly rise
Oil prices moved higher on Friday and were set to record another weekly gain, amid concerns that developments in Venezuela and Iran could disrupt global supply.
Brent crude futures rose 0.8% to $62.47 a barrel, while US West Texas Intermediate advanced 0.8% to $58.21. Both benchmarks jumped more than 3% on Thursday after two days of declines, putting them on track for weekly gains of around 2%—the third consecutive weekly increase.
Supply worries have been fuelled by civil unrest in major Middle Eastern producer Iran, alongside fallout from the Trump administration’s seizure of Venezuelan President Nicolas Maduro last week and his claims that the US intends to control the South American country’s oil sector.
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