European stocks rose on Friday, pushing Germany’s Dax close to a record high, as investors awaited speeches by central bankers later in the day for clues on the future direction of interest rates.
The benchmark index in Frankfurt gained 0.3 per cent in early trade, putting it less than 100 points off the 16,290 high set in November 2021, as investors were encouraged by further signs that inflation was cooling.
The country’s producer price index for April showed that the annual rate of inflation had fallen to 4.1 per cent compared with 6.7 per cent in March. The reading was 0.1 percentage points higher than the forecast of economists polled by Reuters.
Europe’s region-wide Stoxx 600 rose 0.4 per cent while London’s FTSE 100 added 0.3 per cent at the market open.
Traders also took their cue from Wall Street’s gains in the previous session, which followed the announcement that policymakers in Washington could vote on a bill to raise the US debt ceiling as early as next week, averting default ahead of the June 1 deadline.
Investors were also preparing for public speeches from the European Central Bank president Christine Lagarde and board member Isabel Schnabel, who could offer an indication of the path for the eurozone’s interest rates as they appear at separate events later in the day.
The central bank slowed the pace of its rate increases this month, lifting its deposit rate by a quarter-percentage point to 3.25 per cent and saying it had more ground to cover.
Federal Reserve chair Jay Powell and the Bank of England’s Jonathan Haskel are also set to speak on Friday.
Contracts tracking Wall Street’s benchmark S&P 500 and those tracking the tech-heavy Nasdaq 100 were flat ahead of the New York open.
The yield on interest rate-sensitive two-year Treasury notes was down 0.05 percentage points to 4.23 per cent. The yield on the benchmark 10-year note lost 0.02 percentage points to 3.63 per cent. Bond yields rise when prices fall.
The dollar index, which tracks the currency against a basket of six peers, fell 0.2 per cent.
Asian stocks were down, as pessimism over the tech sector stopped the US rally from spreading to the region.
Hong Kong’s Hang Seng index retreated 1.5 per cent, while China’s benchmark CSI 300 stock dropped 0.3 per cent, after weak third-quarter results from tech giant Alibaba damped investor sentiment.
China’s onshore currency fell 0.1 per cent to 7.027 against the US dollar, its lowest level since December after China’s April data showed weak consumer spending and industrial production, as well as record-high youth unemployment. The numbers pointed to a faltering economic recovery following the unwinding of its zero-Covid curbs last year.