Europe stocks turn higher, sterling and euro gain following U.S. jobs report

LONDON — European stocks turned higher Friday afternoon, looking to snap a run of four straight losses this week as global investors assess fresh U.S. jobs data.

The pan-European Stoxx 600 was up 0.19% p.m. at 2:30 p.m. in London, reversing course from the morning. The index had tumbled more than 2.5% this week in its worst performance since the early August sell-off.

All eyes are on the U.S. August jobs report, which showed payrolls rose 142,000, less than the 161,000 forecast by analysts polled by Dow Jones. The unemployment rate met expectations for a decline to 4.2% from 4.3%.

U.S. stocks moved higher following the release, as anticipation built around a forthcoming rate cut from the Federal Reserve.

A slew of data from the U.S. has already come in weaker than expected this week, including manufacturing surveys, jobs openings and private sector payrolls, fueling bets that the Fed will cut by 50 rather than 25 basis points at its Sept. 18 meeting. CME Group’s FedWatch tool last put the probability of a 50 basis point cut at nearly 50%, higher than before the latest release.

The British pound and euro both strengthened against the U.S. dollar in morning deals, but slipped following the jobs report.

In Europe, Volvo Cars slid 4% to its lowest level since January. The Swedish automaker said on Thursday that it would scale back its medium-term margin and revenue targets, along with its aim of selling all electric and plug-in hybrid vehicles by 2023. Shares were last seen down 1.86%.

Investors are also monitoring news that the European Union Aviation Safety Agency has ordered inspections of the Rolls-Royce manufactured engines on Airbus A350-1000 aircraft, used by numerous airlines. That comes after a Cathay Pacific A350 flight from Hong Kong to Zurich was forced to land because of a fire in the fuel system, triggering a fleet-wide inspection and the replacement of numerous engine parts.

Next week, U.K. employment and wage data and economic growth figures will be released, and the next monetary policy meeting for the European Central Bank will take place following its summer break.

The ECB is widely expected to resume the path of interest rate cuts following a pause in July.