European stocks look set to open higher on Friday, though the upside may remain limited as investors await more U.S. data and bank earnings for directional cues.
As inflation and rate hike worries ease, investors will assess U.S. reports on retail sales, industrial production, import and export prices and consumer sentiment later in the day for additional clues about the economic outlook.
The European economic calendar remains light, with Germany’s wholesale price data for March and final consumer price data from France due later in the session.
On the earnings front, U.S. financials giants Citigroup (C), JPMorgan Chase (JPM) and Wells Fargo (WFC) are due to report their quarterly results before the opening bell.
Asian markets traded mostly higher as Singapore’s central bank kept its policy settings unchanged after five straight tightening moves since October 2021.
Gold traded at a 13-month high and was on track for a second weekly gain, as the dollar tumbled on bets that the Federal Reserve may soon pause its hiking of interest rates to tame high inflation.
CME Group’s Fedwatch tool indicates the Fed will raise the federal fund rate by 25 basis points in May, with rate cuts seen in the back half of the year.
It appears the European Central Bank is also moving towards a smaller 25-bps rate hike in May.
Oil prices were seeing modest gains in Asian trading, after having slipped overnight on fears of a looming recession in the United States and OPEC’s warning on potential headwinds.
U.S. stocks rallied overnight after data showed producer prices unexpectedly fell in March and new claims for unemployment benefits rose more than expected last week, helping ease concerns about the outlook for interest rates.
The Dow jumped 1.1 percent and the S&P 500 added 1.3 percent to reach their best closing levels in nearly two months while the tech-heavy Nasdaq Composite jumped 2 percent.
European stocks closed higher for a fourth straight session on Thursday, as China reported robust export growth in March, LVMH posted strong Q1 sales growth and reports suggested that ECB policymakers are converging on a 25-bps rate hike in May.
The pan European STOXX 600 rose 0.4 percent. The German DAX and the U.K.’s FTSE 100 both edged up around 0.2 percent while France’s CAC 40 gained 1.1 percent.
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