European stocks are expected to experience moderate gains at the opening on Friday, on the back of Federal Reserve Chair Jerome Powell's assertion that the U.S. Central Bank is nearing the confidence required to initiate a reduction in interest rates.
This forecast was echoed by Cleveland Fed President Loretta Mester on Thursday, suggesting there was a probability of rate cuts happening later in the year, but there isn't an immediate need to implement them.
Currently, according to the CME FedWatch Tool, the probability of rate cuts in May and June stands at 25.5% and 56.7%, respectively.
In the backdrop of a depreciating U.S. dollar and declining bond yields across the curve, Asian markets witnessed a firm rise. Gold experienced a slight drop following a historic rally, whereas oil prices crept up after experiencing a fall in the previous session due to apprehensions over Chinese demand and uncertainty about future interest rates.
Trading tendencies as the day progresses could be shaped by the response to the Labour Department's jobs report for February. Economists predict a surge of 200,000 jobs for February following an increase of 353,000 jobs in January, with the unemployment rate remaining steady at 3.7%.
Essential data releases anticipated in Europe include Germany's industrial production figures and the Eurozone's revised quarterly national accounts.
U.S. stocks saw an increase, furthering previous session's gains, following Powell's statement to a U.S Senate committee that the U.S. Central Bank is "not far" from having the necessary confidence in reducing inflation to begin cutting interest rates.
In terms of economic releases, while weekly jobless claims remained constant, the U.S. trade deficit for January was wider than anticipated. Labour costs for Q4 showed a smaller than expected increase though worker productivity saw significant growth in the fourth quarter.
The S&P 500 experienced a 1% surge to reach a record high at closing, and the tech-centric Nasdaq Composite increased by 1.5%, while the Dow Jones edged up by 0.3%. On Thursday, European stocks ended favourably as the European Central Bank curtailed its annual inflation forecast, indicating that it won't commence rate cuts before June.
The pan European STOXX 600 grew by 1%, Germany's DAX went up by 0.7%, France's CAC 40 grew by 0.8%, and the UK's FTSE 100 marginally increased by 0.2%.
