European stocks look set to open higher on Friday, as comments from a Federal Reserve official raised hopes that the Fed with stick with a 25-bps rate hike at its next meeting in March.
Asian markets rose broadly despite increased political tensions between the United States and China.
The United States is seeking backing from its allies for imposing new sanctions on China if Beijing provides military support to Russia for its war in Ukraine, media reports said, citing four U.S. officials.
In another development, the leaders of China and Belarus have expressed their “extreme interest” in a peaceful resolution in Ukraine.
Traders also await the outcome of the annual parliamentary gathering in Beijing, which kicks off this weekend to set economic targets and elect a new leadership team.
The dollar eased and was set for its first weekly loss since January ahead of the U.S. ISM non-manufacturing PMI numbers and several FOMC member speeches later in the day.
Data from a private sector survey showed earlier in the day that activity in China’s services sector expanded at the fastest pace in six months in February.
Japan’s services sector in February expanded at its fastest rate since June 2022, while the services sector in Australia bounced back into expansion in February, separate reports showed.
Gold traded higher and looked set to post its biggest weekly gain since mid-January.
Oil edged down slightly in Asian trading but headed for a weekly gain of nearly 2 percent on optimism over China’s recovery.
U.S. stocks rose overnight as Treasury yields retreated from earlier highs on comments from Atlanta Federal Reserve President Raphael Bostic suggesting that he favored “slow and steady” path of interest rate hikes.
In economic releases, weekly jobless claims declined further, indicating continued strength in the labor market, while labor costs grew faster than initially thought in the fourth quarter, separate reports showed.
The Dow rallied 1.1 percent, the tech-heavy Nasdaq Composite gained 0.7 percent and the S&P 500 advanced 0.8 percent.
European stocks closed Thursday’s session slightly higher as a measure of euro area inflation slowed and ECB President Christine Lagarde indicated that further interest rate hikes are “possible” after March, depending on the incoming data.
The pan European STOXX 600 rose half a percent. The German DAX edged up 0.2 percent, France’s CAC 40 index rose 0.7 percent and the U.K.’s FTSE 100 added 0.4 percent.
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