European stocks edged lower on Friday, as investors digested a tumultuous week of political drama in Spain and the U.K., but also focused on the monthly U.S. jobs report due later.
Latest levels: The Stoxx Europe 600 index SXXP, -0.21% fell 0.2% to 390.35, trimming its weekly gain to 0.6%.
The euro EURUSD, -0.0342% dropped to $1.1697 from $1.1711 on Thursday, as investors bought dollars ahead of the U.S. nonfarm payrolls report. The closely watched monthly jobs report is expected to give further clues to the likelihood of a December interest-rate increase by the U.S. Federal Reserve, which could drive financial markets around the world. The report is due at 8:30 a.m. Eastern Time, or 1:30 p.m. London time.
Week of uncertainty: The pan-European Stoxx Europe 600 has flipped in and out of losses for most of the week, buffeted by events in Catalonia, where separatists have vowed to declare the region’s independence from Spain.
Prime Minister Mariano Rajoy’s government has been criticized for its heavy-handed response to Sunday’s referendum on independence and to subsequent developments. Separatist leaders looked ready to declare independence as early as Monday next week, but national authorities moved to thwart that Thursday by closing the regional parliament for that day.
“Yesterday’s ruling by the Spanish constitutional court to suspend the Catalan parliament on Monday wasn’t entirely unexpected, as the government in Madrid look to head off steps to call for independence by Catalan politicians,” said Michael Hewson, chief market analyst at CMC Markets UK.
“However, short of a military presence, there is little that Spanish politicians can do to physically stop the parliament convening anyway, which is what is expected to happen next week anyway,” he added in his note.
Spanish assets suffer: Spain’s IBEX 35 index IBEX, -0.93% was set for a 2.3% drop for the week, after hitting an almost seven-month low on Wednesday. The index was down 0.8% at 10,134.50 on Friday, led by losses for banks.
Shares of Banco de Sabadell SA SAB, -3.55% fell 2.9%, and CaixaBank SA CABK, -2.39% lost 2.2%. They rallied in Thursday’s session on reports the companies were looking to move their headquarters out of Catalonia.
On Friday, Spanish daily El Mundo reported that major cava producer Freixenet also was considering moving its corporate address outside the region.
Other indexes: France’s CAC 40 index PX1, -0.18% dropped 0.2% to 5,370.16. The country’s current-account and trade deficits narrowed in August as the country’s exports strengthened, statistics showed Friday.
Germany’s DAX 30 index DAX, +0.06% rose 0.1% to 12,979.99. A report showed orders for Germany’s important manufacturing sector surged in August, more than compensating for July’s unexpected decline.
The U.K.’s FTSE 100 index UKX, +0.17% rose 0.1% to 7,561.60, boosted by a weaker pound. Sterling GBPUSD, -0.4879% fell to $1.3076 from $1.3118 late Thursday on New York, as speculation mounted that the U.K. is headed for another early general election after Prime Minister Theresa May came under pressure.
The pound was on track for a 2.4% weekly loss, its worst week since the early October flash crash a year ago.
Stock movers: Shares of Ryanair Holdings PLC RY4C, -1.91% fell 1.6% after the discount carrier’s Chief Executive Michael O’Leary promised to boost pilots’ pay, in a move seen as an attempt to ease recent tensions.
Shares of EasyJet PLC EZJ, -2.02% fell 2.3% after the discount airline said it expects profit for fiscal 2017 to be at the upper end of its guidance range, but also highlighted pressures facing the sector.
Daimler AG DAI, +0.39% rose 0.7% after the German car maker said its Mercedes-Benz group sold 3.7% more vehicles in September, with increased SUV sales and a rise in Chinese demand.