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European Markets May Open Slightly Higher

stockmarkets jan04 11sep20 lt

European stocks are likely to turn in a mixed performance on Friday with investors looking for fresh direction. Higher U.S. index futures point to a somewhat positive start for European markets.

News about coronavirus pandemic, updates on vaccines and Brexit negotiations will then set the trend for the markets.

Investors will also be tracking earnings reports and other corporate news for direction.

The ECB left its key interest rates and the size of asset purchases unchanged on Thursday, and reiterated that it stands ready to make adjustments to its tools when needed.

The ECB said the Governing Council expects the key interest rates to remain at their present or lower levels until it has seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2% within its projection horizon, and such convergence has been consistently reflected in underlying inflation dynamics.

The size of the pandemic emergency purchase programme (PEPP) was left unchanged at EUR 1,350 billion.

ECB President Christine Lagarde said in a press conference after the policy announcement that policymakers are watching the appreciation in the euro closely for any impact on prices, and reiterated that the bank stands ready to adjust all its tools when needed to support the fragile economic recovery in the euro area.

"We have to monitor carefully such a matter," she said. However, policymakers did not see an immediate need to act on it, she added, and reiterated that the ECB does not target the exchange rate.

It's a light day today with regard to Eurozone economic events.

At 2.00 am ET, the Office for National Statistics will release UK monthly GDP, industrial output and foreign trade figures. The UK economy is forecast to expand 6.7% on month in July, slower than the 8.7% growth logged in June.

Industrial production growth is seen easing to 4% in July from 9.3%. The trade deficit is expected to widen to GBP 6.9 billion in July from GBP 5.12 billion a month ago.

Destatis will release Germany's final consumer price data for August, also at 2 am ET. According to preliminary estimate, consumer prices remained unchanged on year, following a 0.1% drop in July.

At 3.00 am ET, Spain INE will release final consumer price figures for August. The statistical office is expected to confirm 0.5% fall in consumer prices in August.

Hungary's industrial production data for July is also due at 3 am ET. Economists expect production to have declined 8.1% on year in June.

Finally, at 4.00 am ET, Italy's Istat releases quarterly unemployment data.

The pan European Stoxx 600 declined 0.59%. The U.K.'s FTSE 100 edged down 0.16%, Germany's DAX slid 0.21% and France's CAC 40 ended down 0.38%, while Switzerland's SMI shed 0.18%.

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