Following a mixed-to-lower session in Asia, European stock markets opened marginally higher before turning mixed on Friday. On the data front, the IHS Markit composite PMI in the UK hit 62.0, its highest since the survey was launched in 1998. U.K. retail sales jumped 9.2% in April, double the average projection. In the Eurozone, the initial flash composite PMI came in at 56.9 compared to April’s 53.8. A flash Eurozone consumer confidence reading is due later today.
Elsewhere, the European Union on Thursday agreed a deal on Covid-19 passes intended to permit tourism across the bloc this summer. Meanwhile, Eurogroup President Paschal Donohoe said that prospects for Eurozone are improving, and by summer they will reach 70% vaccinations in the EU.
Also on the positive side, the World Health Organization's regional director for Europe said the vaccines being used on the continent appeared able to protect against the current variants in circulation. Meanwhile, German health official said studies suggest existing vaccines are less effective against India COVID-19 variant.
Against this backdrop, the UK FTSE 100 sheds 0.02% to 7,018, Italy’s FTSE MIB gains 0.74% to 24,883, France’s CAC 40 is up by 0.52% to 6,376, while the German DAX 30 rises by 0.24% to 15,406. US stock index futures slightly higher ahead of the opening bell on Wall Street.
In currencies, the dollar looks mixed on Friday, struggling for direction following the recent decline. However, it looks like the greenback starts to look somehow steadier after this week’s volatility. The USD index struggles for direction in the sub-90.00 area at the end of the week. The index has reversed some of the recent weakness, although still trading in levels below the 90.00 mark, as traders have already fully digested the FOMC minutes released earlier this week. As such, EURUSD faded an earlier jump to the 1.2240 area amid the declining yields in the 10-year German bunds.
Meanwhile, oil prices dipped to nearly one-month lows around $64.50 earlier in the day as traders started to factor in the potential return of Iranian crude supplies after Iranian President Hassan Rouhani offered optimistic comments on state media amid ongoing talks between U.S. and Iranian delegations. However, Brent crude managed to stage a bounce and recovered to the $66 area in recent trading. In the short term, the upside potential looks limited anyway.
Nathan Lambert, Head of Global FX Analytical Department