European Shares Set To Follow Asian Peers Higher
European stocks may open higher on Friday after China cut its five-year loan prime rate (LPR) by 15 basis points, a sharper cut than had been expected, to help cushion an economic slowdown. However, the one-year LPR that affects commercial borrowers was left unchanged.
On the flip side, Shanghai reported new COVID-19 cases outside quarantined areas for the first time after five days of no infections.
Asian stocks rose broadly despite Wall Street falling closer to bear territory overnight on concerns about Russia’s war on Ukraine and the Chinese economic slowdown.
U.S. President Joe Biden met the leaders of Sweden and Finland on Thursday to discuss their NATO membership bid and offered U.S. support in the event of “aggression” during the application process.
Elsewhere, Sri Lanka has defaulted on its debt for the first time in its history after a 30-day grace period to come up with $78m (£63m) of unpaid debt interest payments expired.
The U.S. dollar headed for its worst week since early February against major peers amid U.S. yield retreat, and gold traded flat while oil prices slipped after rising sharply in the previous session on expectations that crude demand could rebound in China.
In economic releases, the Office for National Statistics releases U.K. retail sales figures for April later in the day. Sales are forecast to fall 0.2 percent on a monthly basis, slower than the 1.4 percent decrease posted in March.
Germany’s producer price data is also due. Producer price inflation is seen at 31.5 percent in April versus 30.9 percent in March.
The European Commission is scheduled to issue eurozone flash consumer confidence survey results. The sentiment index is forecast to rise to -21.5 in May from -22.0 in April.
U.S. stocks fluctuated before finishing firmly in the red overnight as investors weighed prospects for growth against a backdrop of prolonged inflation and a more aggressive policy tightening by the Fed.
Disappointing readings on first-time claims for U.S. unemployment benefits, existing home sales and regional manufacturing activity stoked concerns that the U.S. economy could be heading for a recession next year.
The Dow dropped 0.8 percent and the S&P 500 shed 0.6 percent to close at their lowest levels in over a year while the tech-heavy Nasdaq Composite eased 0.3 percent.
European stocks closed lower on Thursday on worries about soaring inflation and slowing global growth.
The pan European Stoxx 600 fell 1.4 percent. The German DAX gave up 0.9 percent, France’s CAC 40 index declined 1.3 percent and the U.K.’s FTSE 100 tumbled 1.8 percent.
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