European Shares Poised For Higher Open After Waller’s Remarks

European stocks are seen opening on a firm note Friday as investors react to dovish remarks from Federal Reserve Governor Christopher Waller and upbeat economic data from China.

Waller told CNBC on Thursday that the central bank could lower interest rates multiple times this year if inflation continues to ease as expected.

He sees three or four quarter-percentage-point rate reductions this year “if the data cooperates.” If the data doesn’t cooperate, then you’re going to be back to two and going maybe even one, he said.

Following his remarks, traders have increased their bets for a slightly more aggressive pace of rate cuts.

Meanwhile, data showed the Chinese economy grew more than expected in the fourth quarter of 2024, bringing the annual GDP to 5 percent and matching Beijing’s 5 percent growth target.

Industrial production grew more than expected in December and retail sales came in stronger than expected, helped by a flurry of stimulus measures combined with an export push before looming U.S. tariffs.

The U.S. economic calendar for today remains relatively light, although reports on industrial production and housing starts may still attract some attention.

Asian markets traded mixed, while the Japanese yen is set for its strongest weekly performance in over a month amid BoJ rate hike bets.

The dollar was down against peers in Asian trade. Gold held steady near a more than one-month high and was set for a weekly gain on revived hopes of Fed rate cuts.

Oil inched higher and headed for a fourth weekly gain, driven by concerns over tighter supply following U.S. sanctions on Russian oil producers.

U.S. stocks succumbed to profit taking overnight, a day after a benign inflation reading and strong bank earnings helped the three major indexes notch their biggest one-day percentage gain in over two months.

The tech-heavy Nasdaq Composite shed 0.9 percent, while the Dow and the S&P 500 both slid around 0.2 percent despite a retreat in bond yields.

In economic news, retail sales growth slowed down more than expected in December and weekly jobless claims increased more than expected last week while a gauge of manufacturing activity in the U.S. Mid-Atlantic region shot up by the most in about four-and-a-half years in January, a slew of data showed.

European stocks hit their highest level in a month on Thursday, with strong results from Cartier owner Richemont and renewed rate-cut hopes helping underpin investor sentiment.

The pan European STOXX 600 rallied 1 percent. The German DAX rose 0.4 percent, France’s CAC 40 surged 2.1 percent and the U.K.’s FTSE 100 added 1.1 percent.

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