© Reuters.
Investing.com – European stock markets are expected to open with small gains on Friday, buoyed by a rally on Wall Street overnight after weak US employment data reinforced expectations of a more dovish lean by the Federal Reserve next week.
At 02:00 ET (06:00 GMT), the contract in Germany was up 0.1%, the contract in France was up 0.1% and the contract in the UK was up 0.2%.
Europe is poised to follow Asia and the United States on the rise
Stocks on Wall Street closed higher on Thursday, with the broad closing at a new high for the year, after orders for shares last week jumped to the highest level since October 2021.
Investors took the sign of weakness in the US labor market as enhancing the Federal Reserve’s chances of skipping an interest rate hike next week, thus reducing monetary pressure on the US economy.
Stocks in Asia rose in response to gains on Wall Street, and European stocks are expected to follow suit.
Weak Chinese inflation data capped European gains
However, gains were likely to be limited on Friday after data released earlier in the session showed that China contracted in May from the previous month, while it sank at its fastest pace in seven years.
This weak inflation data raised more questions about the slowing economic recovery in the country, which is the main driver of growth in the region as well as a vital key export for many major European companies.
European Central Bank to raise next week
While there is uncertainty about what the Fed will announce next week, the ECB’s next move is more certain, with a fully priced quarter-point increase for Thursday.
The only real uncertainty is when the next quarter-point increase will come, ie will summer take time off to reassess?
The head of the European Central Bank said on Monday it was too early to peak, and a clear majority of economists polled by Reuters expect another 25 basis point increase in July.
The ECB vice president is due to speak at an event in Madrid later in the session, while April data could also provide guidance.
Dassault Systems aims to maximize profits
Dassault Systemes (EPA:) will be in the spotlight on Friday after the French software company announced that it aims to double its earnings per share by 2028.
It also announced that Pascal Dalluz will become its new CEO at the beginning of next year.
Oil is falling after the weak Chinese data
Oil prices fell on Friday after dismal inflation data from China raised fears that slowing economic growth in the world’s largest importer of crude could hurt demand growth this year.
By 02:00 ET, futures were trading 0.8% lower at $70.71 a barrel, while the contract was down 0.8% at $75.33.
In addition, it rose 0.1% to $1,980.15 an ounce, while it was trading down 0.1% at $1.0779.