European Shares Seen Higher At Open

European stocks are likely to open higher on Friday, with underlying sentiment likely to be supported by a strong rebound on Wall Street overnight.

The dollar held firm in Asian trading after falling in the U.S. trading session. The Japanese yen hovered around a 32-year low amid expectations for Fed rate rises totaling 125 bps by year-end. After a red-hot inflation reading, Fed funds currently price in small chance of 100-bps hike in November.

The British pound held on to its big gains on speculation of a possible U-turn by the U.K. government on its fiscal plans. The focus will remain on bond markets ahead of the BoE bond-buying deadline set to end today.

Asian markets followed Wall Street higher, and gold and oil prices were marginally higher ahead of U.S. retail sales and consumer sentiment data due later in the day.

Earnings news is also likely to attract attention, with financial giants Citigroup, JPMorgan Chase, Morgan Stanley and Wells Fargo among the companies due to report their quarterly results before the U.S. opening bell.

The European economic calendar remains light, with final consumer price data from France and Germany’s wholesale price figures for September due.

U.S. stocks reversed course to post strong gains overnight even as the September inflation report showing core inflation at a 40-year high poured cold water on hopes of Fed pivot.

Consumer prices rose 0.4 percent in September compared to August, while economists had expected a 0.2 percent increase.

The S&P 500 hit its lowest level since November 2020 before seeing a sharp turnaround to close 2.6 percent higher. The Dow climbed 2.8 percent and the tech-heavy Nasdaq Composite surged 2.2 percent.

European stocks also closed higher on Thursday. The pan European Stoxx 600 rose 0.9 percent. The German DAX rallied 1.5 percent, France’s CAC 40 index gained 1 percent and the U.K.’s FTSE 100 added 0.4 percent.

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