European Markets Waver Amid Bond Yield Pressures

European shares dipped slightly on Friday due to high government bond yields, with focus on U.S. jobs data for insights on Federal Reserve rate decisions. STOXX 600 saw marginal weekly gains. German 10-year bund yields rose, affecting utilities and alcohol stocks. Ubisoft shares tumbled on game delay news.

On Friday, European shares saw a modest decline as high government bond yields exerted pressure on the stock market. Investors closely watched the forthcoming U.S. jobs data for indications on the Federal Reserve's interest rate strategy.

The STOXX 600 index in Europe decreased by 0.1% as of 0816 GMT. Despite this, it was positioned for its strongest weekly performance in six weeks. The yield on European government bonds remained elevated, with Germany's 10-year bund yield reaching a six-month peak. Notably, the utilities sector, often seen as a bond proxy, experienced a 1% drop.

Anticipation surrounds the U.S. jobs report, expected at 1330 GMT, which may reveal deceleration in job growth for December, yet is likely to demonstrate ongoing robustness. The unemployment rate is projected to remain at 4.2%, aligning with the Federal Reserve's cautious approach towards interest rate reductions this year. Within the STOXX index, the food and beverages subsector faced losses, with prominent drops in alcohol makers like Pernod Ricard and Heineken, each falling by approximately 1%. Meanwhile, Ubisoft's shares plunged by 8% following news of another delay in their renowned Assassin's Creed game series.

(With inputs from agencies.)