Europe Pushes Higher as Trade War Threat Recedes
European stock markets pushed higher Friday, helped by a lessening of tensions between China and the U.S. ahead of key employment data.
At 4 AM ET (0800 GMT), the DAX in Germany traded 0.8% higher, and France’s CAC 40 rose 0.6%. The U.K.’s FTSE index was closed due to a holiday.
China’s Vice Premier Liu He talked with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin by phone on Friday Beijing time, according to China’s Xinhua News Agency. The two sides pledged to cooperate on the economy and public health, the report said.
The two sides have traded barbed comments about the origin and spread of the Covid-19 pandemic over recent days, with the Trump administration at one point threatening trade sanctions as a punishment for China’s perceived part in the outbreak.
In corporate news, ING stock climbed over 5% despite the Dutch bank posting a drop in first quarter profit of 35% on the back of higher provisions taken for the potential fallout from the coronavirus outbreak. The numbers were still better than expected.
However, activity is likely to be limited Friday ahead of the key U.S. employment report for April, which will capture an entire month of lockdown measures that brought large parts of the economy to a standstill.
Economists expect that nonfarm payrolls plunged by 22 million last month, when the data are released at 8:30 AM ET (12:30 GMT).
“That bad report tomorrow is actually going to understate how bad the damage has been,” Minneapolis Federal Reserve Bank President Neel Kashkari explained, adding that the reported unemployment rate could be as high as 17%, but he says the true number may be as high as 24%. “It’s devastating.”
Oil futures pushed higher Friday, with investors cautiously optimistic as lockdown measures continue to be loosened in the U.S. leading to slow but steady increases in demand.
At 4 AM ET, U.S. crude June futures traded 4.8% higher at $24.69 a barrel. The international benchmark Brent contract rose 2.8% to $30.28.
Elsewhere, gold futures rose 0.2% to $1,729.80/oz, while EUR/USD traded at 1.0828, largely flat.