European markets rose on Friday to register fresh record highs as global investors continue to digest strong economic data out of the U.S. First-time jobless claims fell to a new pandemic low of 406,000 last week while the GDP expanded at an annualized 6.4% pace in the first quarter unrevised from the prior estimate released last month. The price index for GDP rose 4.1% in the first quarter, the fastest pace since 1990. Meanwhile, Senate Republicans presented a $928-billion counteroffer to President Joe Biden overnight, well below the White House’s latest $1.7 trillion proposal.
In Europe, the Eurozone economic sentiment climbed more than expected in May to notch a three-year high. The index rose to 114.5 points from 110.5 in April versus 112.1 expected. The French GDP contracted by 0.1% in the first quarter on the back of weak construction activity. Elsewhere, Bank of England Chief Economist Andy Haldane said there is a chance that price pressures get embedded in pay demands. He also expressed optimism over economic prospects for London city center in the medium to long term.
Against this backdrop, the UK FTSE 100 gains 0.22% to 7,034, Italy’s FTSE MIB gains 0.11% to 25,082, France’s CAC 40 is up by 0.46% to 6,465, while the German DAX 30 rises by 0.47% to 15,479. US stock index futures are edging higher ahead of key economic reports.
In currencies, the dollar is marginally higher on Friday as traders bet on strong PCE data due later today. EURUSD failed to get back above the 1.2200 figure while deriving support from this week’s lows around 1.2170. A break below this area would pave the way towards the ascending 20-DMA, today at 1.2143. Upbeat economic data out of the US could add to a more positive tone surrounding the greenback later today. Despite the prevailing downside pressure, the euro managed to bounce from the mentioned lows in recent trading to turn nearly unchanged on the day.
Meanwhile, oil prices keep trending north, flirting with 1.5-week highs around $69.60 on Friday amid the prevailing upbeat tone in the global financial markets. As such, Brent crude is nearing the $70 barrier that could deter bulls once again and trigger a downside correction ahead of the weekend. The recent rally was boosted by strong economic data out of the United States. On the other hand, a stronger dollar caps gains in the oil market.
Nathan Lambert, Head of Global FX Analytical Department