RTTNews - The major markets across Europe are expected to open higher on Friday on Wall Street's gains, which was built on the back of easing interest rate concerns, higher commodity prices and better-than-expected economic data. Better-than-expected industrial production data from Japan and positive trading across Asian markets might also influence the markets across Europe.
Easing concerns about rising bond yields, the $26.0 billion seven-year note auction conducted by the Treasury Department in the U.S. attracted a high-yield of 3.30% while seeing modestly strong demand, with the bid-to-cover ratio coming in at 2.26.
A report from the Commerce Department showed that orders for durable goods jumped 1.9% in April following a downwardly revised 2.1% decrease in March. Economists had expected orders to edge up 0.5% compared to the 0.8% drop that had been reported for the previous month.
Another report from the Commerce Department revealed that new homes sales edged up 0.3% to an annual rate of 352,000 in April from a downwardly revised 351,000 in March. Economists had expected sales to rise to 360,000 from the 356,000 originally reported for the previous month.
A separate report from the Labor Department showed that initial jobless claims in the week ended May 23rd came in at 623,000. This was down 13,000 from a revised mark of 636,000 in the previous week. Economists had expected claims to fall to 628,000 from the 631,000 originally reported for the previous week. However, continuing claims, which measure the number of people receiving ongoing unemployment help, climbed 110,000 to 6.788 million.
Unexpected drop in crude oil inventories in the U.S. amid a OPEC decision not to tinker with output helped crude oil futures for July delivery in New York to surge past the $65 per barrel mark generating some buying interest in the commodity space.
The Dow closed up 103.78 points or 1.3% at 8,404, the Nasdaq closed up 20.71 points or 1.2% at 1,752 and the S&P 500 closed up 13.77 points or 1.5% at 907.
In Asia, the markets in China and Taiwan are closed for holidays. The other markets are trading in positive territory mirroring Wall Street gains and better-than-expected industrial production data from Japan that supported resource stocks in anticipation of an increase in demand.
The markets across Europe snapped the three-day gains and ended in negative territory on Thursday as concerns about mounting government debt dented hopes that the global recession is easing.
The FTSEurofirst 300 index of pan-European blue chips closed 1.20% lower at 860, while the narrower DJ Stoxx 50 index fell 0.97% to 2,118. The U.K.'s FTSE 100 index fell 0.65% to 4,388, while France's CA 40 index slipped 0.95% to 3,264 and Germany's DAX index dropped 1.36% to 4,933.
On the economic front, the European Central Bank is set to release the M3 money supply report. M3 annual growth is seen at 4.5% in April, down from 5.1% in March. Also, Euro area flash consumer price inflation data as well as unemployment details are due at 5.00 a.m. ET. Annual inflation is forecast to ease to 0.2% in May from 0.6%, while the jobless rate is forecast to rise to 9.1% in April from 8.9% last month.
A report released by the Nationwide Building Society in the U.K. revealed that house prices rose 1.2% in May month-over-month, reversing a 0.3% decline reported in April. Economists were looking for a monthly 0.9% decline. The price of a typical house totaled GBP 154,016 compared to GBP 151,861 in April. Separately, a monthly survey from the research group GfK NOP showed that consumer confidence in the U.K. stood stable at minus 27 in May. Economists had expected the index to rise to minus 25.
In another report, Destatis, Germany's Federal Statistical Office announced that the retail sales in real terms increased 0.5% month-on-month in April, compared with a 0.4% drop in the preceding month. The April retail sales came in line with economists' expectations. In nominal terms, retail sales declined 0.9% on an annual basis in April, after falling 1.2% in March. Retail sales increased 0.9% compared to the previous month.
Among corporates, Areva SA might react to news that its Transmission and Distribution division has bagged an order worth Euro 80 million for converter stations from KEPCO of South Korea.
Bank stocks in France might be in action after the second largest bank in the country, Credit Agricole SA revealed that the an accord with Assicurazioni Generali SpA has been suspended temporarily until June 30 in connection with the bank's stake in Intesa Sanpaolo SpA following difference of opinion with Italian regulators. The third largest bank in the country, Societe Generale SpA reported that it has issued preference shares worth EUR 1.8 billion to a government holding company. The preference shares can neither be converted to ordinary stock nor has any voting rights, the bank noted.
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