European Shares Seen Broadly Higher On US Rate Cut Optimism

European stocks are seen opening broadly higher on Friday as strong U.S. GDP growth and cooling inflation bolstered the case for rate cuts.

PCE data, due out later in the day is expected to show inflation eased to 2.5 percent last month, edging closer to the Fed’s 2 percent target.

Markets have raised their expectations for three rate cuts by the end of the year, according to the CME FedWatch tool.

The yen remained stronger ahead of the Bank of Japan’s two-day policy meeting, concluding on Wednesday with board members likely to discuss the possibility of raising interest rates and outline details on tapering bond buying gradually.

Elsewhere, investors expect two interest rate decisions from the Bank of England by December, but next week’s decision remains on a knife edge.

Asian markets traded mixed, and the dollar held steady while the U.S. 10-year yield was little changed in Asian trade after slipping four basis points on Thursday.

Gold held near a three-week low after analysts reiterated their confidence in a soft landing for the U.S. economy.

Oil edged up but was on track for a third straight week of decline on China demand concerns.

U.S. stocks fluctuated before ending mixed overnight as strong Q2 GDP data offset more tech weakness.

Data showed the U.S. economy grew at an estimated 2.8 percent annual rate from April through June, double the rate from the prior quarter.

Inflation pressures subsided, with the personal consumption expenditures (PCE) price index, excluding the volatile food and energy components, increasing at a 2.9 percent rate, down from the prior reading of 3.7 percent in the first quarter.

Durable goods orders plummeted in June while jobless claims fell more than last week, other reports revealed.

The Dow edged up 0.2 percent while the S&P 500 gave up half a percent and the tech-heavy Nasdaq Composite shed 0.9 percent.

European stocks closed lower on Thursday amid jitters over tech companies’ growth and concerns over weakening Chinese demand.

A string of disappointing earnings and weak business sentiment data from Germany also weighed on markets.

The pan European STOXX 600 closed 0.7 percent lower after hitting its lowest for over two months intraday.

The U.K.’s FTSE 100 gained 0.4 percent while the German DAX dipped half a percent and France’s CAC 40 fell 1.2 percent.