European stock markets exhibited restrained movement on Friday as investors held back ahead of the release of the highly anticipated monthly U.S. jobs report and the latest European Central Bank meeting.
At 03:05 ET (08:05 GMT), Germany’s DAX index traded down by 0.2%, the FTSE 100 in the U.K. declined by 0.2%, and France’s CAC 40 edged 0.1% higher.
ECB rate cuts under discussion
The European Central Bank kept interest rates unchanged at record levels on Thursday, in line with expectations. However, it acknowledged that inflation is moderating more rapidly than previously anticipated, potentially paving the way for rate cuts later in the year.
The central bank revised down some of its growth and inflation forecasts, now projecting inflation to reach 2.3% this year, lower than the 2.7% forecasted three months ago. Meanwhile, the growth outlook remains subdued.
On a positive note, data released on Friday revealed a 1.0% increase in German industrial production in January compared to the previous month, surpassing the predicted 0.6% rise and signaling a notable improvement from the revised 2.0% decline recorded at the end of last year.
Revised eurozone gross domestic product data are also scheduled for release later in the session.
Expectations of interest rate cuts later in the year were further reinforced in the United States following comments from Federal Reserve Chair Jerome Powell during a hearing before the Senate Banking Committee on Thursday.
Powell’s remarks indicate that the U.S. Federal Reserve is approaching the level of confidence it requires in the decline of inflation to start reducing interest rates.
This implies that a robust jobs report later on Friday would be necessary to alter the U.S. rate outlook. Analysts anticipate nonfarm payrolls to have risen by just under 200,000 in February, a decrease from January’s substantial increase of 353,000.
Informa gains after strong earnings
Informa (LON:INF) shares saw a 2% increase following the release of their financial results. The U.K.-based information services provider reported a significant revenue increase of 30% to £3.2 billion in 2023, surpassing expectations for underlying profits.
Additionally, Informa updated its guidance for the current year, citing strong free cash flow. Total dividends for the year are expected to increase by 84% compared to the previous year, with £550 million allocated for shareholder returns through buybacks.
Crude rise on demand optimism
Oil prices surged on Friday, buoyed by indications of increasing demand in China and the United States, the world’s two largest economies.
At 03:10 ET, U.S. crude futures climbed 1% to $79.70 a barrel, while the Brent contract rose 0.8% to $83.61 a barrel.
Earlier data from the Energy Information Administration revealed a 4.5 million barrel decrease in U.S. gasoline inventories last week, signaling robust demand ahead of the U.S. driving season.
Furthermore, Chinese crude oil imports saw a 5.1% increase in the first two months of 2024 compared to the same period last year.
In other markets, gold futures saw a 0.2% rise to $2,169.15 per ounce, while EUR/USD edged 0.1% higher to 1.0931.