European stocks look set to open a tad higher on Friday despite U.S. President Donald Trump reiterating tariff, tax threats on foreign countries in his inaugural address at the World Economic Forum 2025 in Davos.
Rate-cut optimism prevails after ECB Governing Council member Jose Luis Escriva said another reduction in borrowing costs at next week’s meeting is very probable.
With risks around the inflation outlook broadly balanced and policymakers lining up behind further interest rate cuts, markets are currently pricing in three to four rate cuts from the ECB this year.
The European economic calendar remains light, with Eurozone HCOB manufacturing & services PMI data awaited later in the day.
Across the Atlantic, a report on existing home sales along with a revised reading on consumer sentiment may garner some attention.
On the earnings front, American Express, Ericsson and Verizon are among the prominent companies due to report their quarterly results before the U.S. opening bell.
Asian stocks were broadly higher, with Japanese markets giving up early gains as the Bank of Japan raised its interest rates to 0.5 percent, the highest level since the 2008 financial crisis, and signaled more increases to come if GDP and price growth hit forecasts.
The yen strengthened and Japanese government bond yields rose to fresh multi-year highs after the BoJ rate hike announcement.
Hong Kong’s Hang Seng surged more than 2 percent, lifted by tech stocks like Tencent and Baidu.
The dollar weakened in Asian trade after Trump said that he would rather not impose tariffs on China during a television interview.
“We have one very big power over China, and that’s tariffs, and they don’t want them,” Trump said in an interview with Fox News. “And I’d rather not have to use it. But it’s a tremendous power over China.”
Gold ticked higher and was on track for a weekly gain due to market concerns over U.S. policy uncertainties.
Oil prices were marginally lower following Trump’s statement about convincing Saudi Arabia and OPEC to reduce crude costs.
U.S. stocks scored their fourth straight day of gains overnight as investors reacted to a mixed bag of corporate earnings and comments from Trump at the World Economic Forum in Davos, Switzerland.
Trump warned global business leaders they will face tariffs for products made outside of the U.S.
Trump also said he would press the Federal Reserve to lower interest rates “immediately,” and ask OPEC and Saudi Arabia to bring down the price of oil.
The S&P 500 rose half a percent to reach a new record closing high while the Dow climbed 0.9 percent and the tech-heavy Nasdaq Composite added 0.2 percent.
European stocks closed at a record high on Thursday as the earnings season picked up steam and optimism prevailed for more ECB rate cuts.
The pan European STOXX 600 gained 0.4 percent. The German DAX and France’s CAC 40 both climbed 0.7 percent while the U.K.’s FTSE 100 edged up by 0.2 percent.
Business News
European Shares Poised For Steady Open
2025-01-24 05:39:37
