European Shares Seen Up As Inflation Concerns Fade

stockmarkets jan04 12nov21 lt

European stocks are likely to open higher on Friday as inflation worries faded to the background.

Analysts say that the current wave of price spikes due to chronic worldwide supply constraints would not last long and inflationary pressure will eventually ease, rather than strengthen.

Bond yields ticked up and the dollar strengthened as money markets price in two rate hikes next year.

Gold and Bitcoin held gains while oil prices fell after OPEC cut its world oil demand forecast for the fourth quarter.

Asian markets were mostly higher after a major Communist Party meeting ended with a resolution paving the way for President Xi Jinping to potentially rule for life.

In economic releases, Eurostat is scheduled to issue euro area industrial production data for September later in the day. Production is expected to fall 0.5 percent month-on-month, following a 1.6 percent decline in August.

Across the Atlantic, trading may be impacted by reaction to the University of Michigan's preliminary report on consumer sentiment in the month of November.

U.S. stocks ended mixed overnight as inflation worries weighed and some traders struck to the sidelines amid the Veterans Day holiday.

The tech-heavy Nasdaq Composite rose half a percent and the S&P 500 finished marginally higher, while the Dow eased 0.4 percent as Disney reported disappointing earnings.

European stocks eked out modest gains on Thursday as China Evergrande Group averted another default and reports suggested that Beijing could moderate its tough stance on the beaten-down property sector.

The pan European Stoxx 600 advanced 0.3 percent. The German DAX edged up marginally, France's CAC 40 index inched up 0.2 percent and the U.K.'s FTSE 100 added 0.6 percent.

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