European Shares May See Cautious Start As Focus Shifts To Earnings

European stocks are seen opening a tad lower on Friday, though underlying sentiment may remain supported somewhat on bets that the U.S. monetary tightening cycle is nearing an end.

Asian markets traded mostly higher amid optimism that policymakers will unveil more stimulus measures to bolster the Chinese economy.

Gold scaled a one-month peak and the dollar slipped for a sixth-straight session as Fed Bank of St. Louis President James Bullard — who called for aggressive hikes — resigned to become the inaugural dean of a university business school.

Fed Bank of San Francisco President Mary Daly told CNBC Thursday that it’s too early to declare victory on inflation as policy effects need to go through the system.

Separately, Federal Reserve Governor Christopher Waller said he’s not ready to call all clear on inflation and favors more rate rises.

Oil prices were set for a third straight week of gains on signs of supply tightness.

The U.S. economic calendar remains light, with reports on export and import prices and the University of Michigan’s preliminary reading on consumer sentiment likely to attract investor attention.

Focus will shift to earnings, with financial giants Citigroup, JPMorgan Chase and Wells Fargo due to release their quarterly results before the start of trading.

U.S. stocks closed higher overnight to build on Wednesday’s sharp gains while the dollar and Treasury yields extended their slide after producer inflation data showed the smallest annual increase in prices in nearly three years, adding to bets the Fed could soon end its monetary tightening campaign.

Meanwhile, weekly jobless claims unexpectedly fell, suggesting a tight labor market.

The tech-heavy Nasdaq Composite and the S&P 500 jumped 1.6 percent and 0.9 percent, respectively to reach their best closing levels in over a year while the Dow inched up 0.1 percent.

European stocks extended gains to a fifth day on Thursday, with sentiment aided by China stimulus hopes, better-than-expected U.K. GDP data and remarks from ECB’s Visco that the central bank is “not very far” from a peak in interest rates.

The pan European STOXX 600 advanced 0.6 percent. The German DAX rose 0.7 percent, France’s CAC 40 added half a percent and the U.K.’s FTSE 100 edged up 0.3 percent.