Europe drifts lower despite Friday’s NFP outperformance

European markets are following their Asian counterparts lower, with Friday’s jobs report failing to lift sentiment. Supermarket stocks lead the way, with a fresh Morrison’s bid raising hopes of a bidding war. Meanwhile, OPEC+ talks continue, with crude prices pushing back towards Thursday’s high.  

• Strong US jobs report fails to lift stocks in Asia and Europe. 

• Morrison's takeover bid lifts supermarket stocks. 

• OPEC+ talks continue, with crude grinding higher despite the standoff.  

European indices have started the week on a somewhat indecisive footing, with overnight losses throughout Asia highlighting the lack of bullish follow-through after Friday’s impressive non-farm payrolls figure. Nonetheless, while Friday’s payrolls figure did draw conclusions that we could see a ramp-up in growth, there are questions over whether traders should in fact be cautious owing to the implications for monetary policy. Elsewhere, a sharp slump in the Caixin Manufacturing PMI has highlighted the fact that Chinese Covid restrictions have seen economic growth across the country almost grind to a halt in June. 

Supermarket stocks are leading the way today, with Morrison’s at the front of the queue. Despite Morrison’s apparently accepting a £6.3 billion takeover offer from Fortress Investment Group, speculation of a bidding war has seen the stock trade above the 254p bid made by the US investment group. It appears that after years of price wars decimating profits throughout the sector, investors are hoping that they finally benefit from a bidding war between three separate American investment firms. With the UK takeover panel giving additional time for rival groups CD&R and Apollo to respond, there could be plenty left to run on this story.  

OPEC+ talks look set to continue, with crude prices continuing to grind higher despite UAE efforts to raise production levels in the future. The agreement between Saudi Arabia and Russia to raise production by 400,000 barrels per month have been pushed back by the UAE, raising concerns that we could see the country break away if undermined. Nonetheless, the continued grind higher in energy prices serves to highlight the confidence that Saudi Arabia will be able to bring the UAE on-side in a bid to maintain an upward trajectory in prices.