- German factory orders fall more than forecast
- UK inflation expectations and house prices rise
- Investors wait on US jobs report
FTSE 100: 0.42%
CAC 40: 0.14%
FTSE MIB: 0.10%
IBEX 35: -0.53%
Stoxx 600: 0.23%
European equities were little changed as German factory orders fell more than expected and as investors waited for an all-important US jobs report.
German factory orders declined 2.2% in October from September when they rose a revised 3.1%, according to the Economy Ministry in Berlin. Economists had pencilled in a drop of 1%.
The report signals a slump in Europe's largest economy at time when the bloc is experiencing a weak recovery.
Nevertheless, European Central Bank (ECB) member Ewald Nowotny said that the Eurozone recession was over and it was time to focus on policies to bolster the economy.
He explained that all of the region's member states will register growth in 2014 with the exception of Cyprus, adding that "fiscal and monetary policies must give this growth a chance".
Meanwhile, and in the US, the afternoon will see the release of non-farm payrolls report which may give some indication on the timing of the Federal Reserve's stimulus reduction.
Payrolls are expected to have fallen to 183,000 in November from 204,000 in October, according to consensus. The unemployment rate is tipped to fall to 7.2% from 7.3%.
"The markets are sure to go mental at 13:30, UK time, an hour before the opening bell in the US, with the release of the jobs report in the US," said Alpari UK analyst Craig Erlam.
The Federal Reserve is turning to economic data, in particular on the labour market, in determining whether the US has recovered enough to start scaling back quantitative easing.
The central bank has indicated that a reduction of its monthly $85bn bond buying programme could come as soon as its next meeting on December 17th and 18th.
UK inflation expectations move higher
Inflation expectations over the next 12 months rose to 3.6% in the UK in November, according to the latest survey from the Bank of England/GfK NOP.
Expectations are now back to the levels seen at the start of the year after having fallen to 3.2% in August.
Another report from Halifax showed UK house prices rose 1.1% November compared to the previous month and were up by 7.7 per cent on the year.
The lender, which is now part of Lloyds Banking Group, said lower borrowing costs and higher consumer confidence helped boost demand during the period.
"The jump in house prices in November reported by the Halifax can only fuel concern over the pace at which house prices are increasing," said Chief UK and European Economist at IHS Global Insight Howard Archer.
House builders rally
A gauge of housebuilders on the FTSE 350 Index gained, including and Persimmon, following the Halifax report.
Berkeley Group also surged after the housebuilder reported a 19.2% rise in first-half profits of £169.2m in the first half, driven by strong demand in the housing sector.
Total SA jumped after Europe's third-biggest oil company agreed to buy a stake in InterOil Corp.'s assets in Papua New Guinea.
TNT Express edged lower as Dutch mail service PostNL said it will sell about half of its 29.8% stake in the pack-delivery company to reduce debt.
Givaudan SA declined as Nestle SA said it will sell shares
worth $1.27bn of the world's largest flavourings maker.
Other asset classes rise
The euro rose 0.04% to $1.3672.
Brent crude futures were up $0.350 to $111.370 per barrel, according to ICE data.