European stock markets are expected to largely open with small losses Friday, as investors cautiously await the release of the key monthly U.S. jobs data which could influence Federal Reserve monetary policy.
At 02:00 ET (07:00 GMT), the DAX futures contract in Germany traded flat, CAC 40 futures in France dropped 0.3% and the FTSE 100 futures contract in the U.K. fell 0.1%.
Equity markets have benefited this week from comments by Federal Reserve Chair Jerome Powell indicating that the U.S. central bank is considering slowing the pace of its interest rate increases at its final policy-setting meeting later this month.
The Fed has hiked by 75 basis points at its last four meetings, but the market is now positioning for a smaller cut of 50 basis points on Dec. 14.
That said, inflation remains at highly elevated levels and data on Thursday showed that the PCE inflation index–the Federal Reserve’s preferred inflation gauge–remained well above the central bank’s target range in October.
The next factor that could influence the Fed’s thinking comes later Friday with the U.S. jobs report. Economists expect about 200,000 jobs were added in November, which would indicate a slowdown in job creation from 261,000 the prior month.
Back in Europe, inflation in the Eurozone fell more than expected in November, but remained near record levels at 10% on an annual basis.
European Central Bank President Christine Lagarde warned on Friday that some European governments’ fiscal policies could lead to excess demand, prompting the central bank to have to tighten monetary policy more than would otherwise be necessary.
The economic data slate in Europe Friday includes October trade data for Germany and Eurozone producer prices for the same month.
In the corporate sector, Credit Suisse (SIX:CSGN) is likely to remain in the spotlight Friday as continued client outflows at the embattled Swiss lender could spark takeover speculation and may lead to the partial sale of its domestic unit, according to analysts at influential investment bank JPMorgan.
Crude oil prices traded largely flat Friday but are set to post a weekly advance on hopes China is set to further relax its COVID restrictions, boosting economic activity and thus demand for energy at the biggest crude importer in the world.
Beijing announced it would allow some infected people to isolate at home in the nation’s capital, another softening of the country’s strict COVID stance, raising hopes of a broader easing of its quarantine protocols in coming days after a period of civil unrest.
Elsewhere, the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, meets virtually on Sunday to decide future production levels, while European Union governments are still discussing the level at which to cap the price on Russian seaborne oil.
By 02:00 ET, U.S. crude futures traded 0.1% lower at $81.12 a barrel, while the Brent contract rose 0.1% to $86.92.
Both benchmarks were on track for their first weekly gains after three consecutive weeks of decline.
Additionally, gold futures fell 0.1% to $1,813.85/oz, while EUR/USD traded 0.1% higher at 1.0527.