European shares edged lower on Friday as elevated government bond yields weighed on stocks, with attention now turning to US jobs data for clues on the Federal Reserve’s interest rate trajectory.

The pan-European STOXX 600 was down 0.1% by 0941 GMT, but remained on track for its strongest week in a month.

Yields on European government bonds remained elevated, with the German 10-year bund yield hitting its highest level in six months.

Utilities, often traded as a bond proxy, were down 0.9%.

The US jobs report, due at 1330 GMT, is expected to reveal a moderation in job growth for December.

The unemployment rate is likely to stay at 4.2%, which would support the Fed’s cautious stance on rate cuts this year.

“Intraday volatility will remain in the next few weeks, both for reason related to rates and politics,” said Luca Finà, head of active equity at Generali Asset Management.

“For Europe, tariff news flow is a significant source of volatility but we think that a significant part of this event has been already priced in the market.”

European stocks see off holiday-shortened week lower

European equities and global bond markets faced sell-offs earlier this week amid talks of US President-elect Donald Trump considering a national economic emergency to impose new tariffs.

On Friday, the food and beverages sub-index was among the top losers, with alcohol manufacturer Pernod Ricard and coffee company JDE Peet’s leading losses, while insurance shed 0.6%.

Helping limit losses, index heavyweight Novo Nordisk gained more than 1%. Telecoms gained 0.4%, with Deutsche Telekom up 1.5% after UBS upgraded Europe’s biggest telecoms group by market value to “buy” from “neutral”.

On the data front, Sweden’s economy grew 1.4% in November from the previous month, while Norway’s core inflation eased more than expected in December.

Switzerland’s unemployment rate rose to a non-seasonally adjusted 2.8% in December from 2.6% in the previous month.

Among individual stocks, French video game maker Ubisoft fell 7.1% after it announced another delay in the newest game in its blockbuster franchise Assassin’s Creed franchise and cut its third-quarter and full-year net bookings outlook.

Ambu A/S jumped 13.2% to the top of the pan-European index after the Danish medical devices maker posted preliminary first-quarter results and hiked it full-year outlook.