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European stocks slip as U.S. jobs report nears

European stocks eased back Friday morning, as investors erred on the side of caution ahead of the U.S. jobs report, which could provide hints for the Federal Reserve interest rates.

The Stoxx Europe 600 index SXXP, -0.28% slipped 0.1% to 365.21, trimming its weekly gain to 1.1%.

Shares of Sanofi SA SAN, -2.52% SNY, +1.59% weighed on the benchmark, falling 2.2% after the French drug maker lost a patent case related to its cholesterol drug Praluent.

The drop also yanked the French CAC 40 index PX1, -0.45% lower, making it the worst performing major European benchmark on Friday. The index fell 0.3% to 4,884.62.

Germany’s DAX 30 index DAX, -0.23% lost 0.2% to 11,559.71, while the U.K.’s FTSE 100 index UKX, -0.06% wavered around the flatline at 7,195.42.

The subtle moves came as investors waited for the top tier nonfarm payrolls report from the U.S. The report is among the key data points considered by the Fed in setting its monetary policy, and a disappointing number for December could dial back expectations for three interest rate increases in 2017.

Lloyds Banking Group PLC LLOY, +1.98% rose 2% after Barclays lifted the lender to overweight from equal weight. Barclays said the U.K.’s economic prospects remain challenging, but are less severe than previously expected.

Rotork PLC ROR, +3.52% jumped 4.2% after Goldman Sachs started coverage of the manufacturing company with a buy rating.

German manufacturing orders fell 2.5% on the month in November, after rising strongly in October. Economists polled by The Wall Street Journal had forecast a 1.5% drop.

Retail sales in Germany dropped in November, too, down 1.8% from October.

Lifted by sales of transportation equipment, France’s trade deficit narrowed in November as exports jumped, the French customs office said Friday.

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