European stocks look set to open higher on Friday, though overall gains may remain limited somewhat due to heightened geopolitical tensions in the Middle East, uncertainty around Fed easing and growing U.S.-China tensions.
Investors also keenly await first-quarter earnings results from the largest U.S. lenders—JPMorgan Chase, Citigroup, and Wells Fargo, due before the U.S. opening bell.
A report on U.S. consumer sentiment that includes readings on inflation expectations may also garner investor attention after more Fed officials said there is no rush to cut interest rates in the very near term.
New York Fed President John Williams said during an event Thursday that inflation still has ‘a ways’ to go to get to 2 percent.
Richmond Fed President Thomas Barkin said that inflation is heading in the right direction over the longer time frame but is not yet where officials want it to be.
Their Boston counterpart Susan Collins said the latest data “implies that less easing of policy this year than previously thought may be warranted”.
On Thursday, the U.S. government sold $22 billion of 30-year notes at a higher-than-expected yield following a dip in demand.
Closer home, GDP and foreign trade from the U.K. and final inflation data from Germany and France are awaited later in the day.
Asian markets were broadly lower ahead of Chinese trade data due later in the day.
U.S.-China tensions were in focus after the U.S. added four Chinese companies to an export blacklist for buying U.S.-origin goods to support China’s military modernization efforts.
The dollar hovered near a five-month high alongside U.S. Treasury yields, while oil and gold prices rose on heightened geopolitical tensions in the Middle East.
The United States has implemented stringent travel restrictions for its employees stationed in Israel after Iran vowed to avenge an airstrike on its embassy compound in Damascus on April 1.
U.S. stocks rebounded overnight following Wednesday’s selloff on concerns surrounding stubborn inflation and the outlook for interest rates.
The tech-heavy Nasdaq Composite jumped 1.7 percent to a new record closing high and the S&P 500 climbed 0.7 percent as a measure of producer price inflation for March came in below estimates. The Dow ended essentially unchanged.
European stocks closed lower on Thursday as the ECB opened the door to a rate cut in June but gave little forward guidance.
Not committing to a specific rate trajectory, the central bank said it would maintain a data-dependent and meeting-by-meeting approach to determine the appropriate level of interest rates.
The pan European STOXX 600 declined 0.4 percent. The German DAX dropped 0.8 percent, France’s CAC 40 eased 0.3 percent and the U.K.’s FTSE 100 shed half a percent.
Market Analysis
European Shares Poised For Higher Open
2024-04-12 05:22:41
