Plus   Neg

European Shares Seen Higher At Open On Fed Hopes


European stocks are likely to open higher on Friday after comments by a top Fed official heightened chances of a 50 bps Fed rate cut during the July 31 meeting.

"It's better to take preventative measures than to wait for disaster to unfold,"
New York Federal Reserve President John Williams told the annual meeting of the Central Bank Research Association on Thursday.

Asian markets advanced as Microsoft's record Q4 results as well as the comments by Williams fuelled appetite for riskier assets and kept a cap on the dollar.

Dovish Fed expectations helped lift gold prices to a six-year high while oil prices climbed around 2 percent after the U.S. Navy shot down an Iranian drone in the Strait of Hormuz, a major chokepoint for global crude flows.

President Donald Trump told reporters the USS Boxer took defensive action after the drone closed to within 1,000 yards of the amphibious assault ship and ignored multiple calls to stand down.

The downing of the Iranian drone comes a month after the Islamic Revolutionary Guards Corps shot down an unmanned U.S. surveillance drone.

Public sector finance data from the U.K. and the euro area current account figures for May are due later in the session, headlining a light day for the European economic news.

Across the Atlantic, sentiment may be swayed by a preliminary report on consumer sentiment in July along with comments by St. Louis Fed President James Bullard, who voted to cut interest rates by 25 basis points at the last Fed meeting.

Overnight, U.S. stocks fluctuated before closing higher despite a mixed batch of corporate earnings results.

The Dow Jones Industrial Average inched up marginally, while the tech-heavy Nasdaq Composite rose 0.3 percent and the S&P 500 added 0.4 percent.

European markets ended Thursday's session lower as earnings woes overshadowed hopes of looser monetary policy from the European Central Bank.

The pan European Stoxx 600 shed 0.2 percent. The German DAX dropped 0.9 percent, France's CAC 40 index eased 0.4 percent and the U.K.'s FTSE 100 declined 0.6 percent.

For comments and feedback contact: editorial@rttnews.com

Market Analysis

Follow RTT