European Shares Seen Up As Investors Cheer Earnings

European stocks may open a tad higher on Friday amid optimism around the earnings season.

Inflation concerns persist, with St. Louis President James Bullard saying that there’s a 50 percent chance that price pressures will persist amid a strong U.S. economy and tight labor market. He advocated for the central bank to be aggressive with the taper process.

Asian markets advanced as TSMC, the world’s biggest chip maker, upgraded its profit outlook and China eased curbs on home loans at some of its largest banks amid growing concern about contagion from the debt crisis at China Evergrande Group.

The dollar fell back from a one-year high and headed for its first weekly decline versus major peers as U.S. 10-year bond yields extended drop after the release of a softer-than-expected producer price report.

Gold was set for its best week in more than five months while Bitcoin extended a climb on a Bloomberg report that a bitcoin futures exchange-traded fund (ETF) will clear the U.S. Securities and Exchange Commission (SEC).

Foreign trade data from euro area and Europe’s new car registrations figures for September are due later in the session, headlining a light day for the European economic news.

Across the Atlantic, trading may be impacted by reaction to reports on retail sales, import and export prices and consumer sentiment.

Earnings news may also attract attention, with Charles Schwab, Goldman Sachs and J.B. Hunt among the companies due to report their quarterly results before the opening bell.

Overnight, U.S. stocks rallied as companies including Morgan Stanley, Bank of America and UnitedHealth posted strong earnings results, and a report showed producer prices eased in September to the lowest level this year, helping cool fears of stagflation.

First-time claims for U.S. unemployment benefits dropped below 300,000 for the first time in well over a year, a sign the job market is still improving.

The Dow climbed 1.6 percent to end at its best closing level in over a month, while the S&P 500 and the tech-heavy Nasdaq Composite index both jumped around 1.7 percent.

European stocks hit over two-week high on Thursday as optimism about strong earnings outweighed concerns about inflation and policy tapering by the Federal Reserve.

The pan European Stoxx 600 rose 1.2 percent. The German DAX climbed 1.4 percent, France’s CAC 40 index surged 1.3 percent and the U.K.’s FTSE 100 added 0.9 percent.

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