European stocks are seen opening slightly lower on Friday after the previous session’s strong rally.
The U.S. dollar sank to a one-month low versus major peers as investors reduced their expectations for Federal Reserve rate hikes this year.
As U.S. inflation expectations fall, it is believed the Fed might slow or even pause its tightening cycle in the second half of the year.
Bond yields held broadly steady and gold edged up as investors await a report on U.S. personal income and spending that includes a reading on inflation said to be preferred by the Federal Reserve.
Oil prices hovered around a two-month high, with Brent crude on track for its biggest weekly jump in 1-1/2 months on signs of tight global supply.
Asian stocks rose broadly after Alibaba and Baidu reported better than expected results, helping ease some concerns over the economic impact of China’s zero-COVID policy.
U.S. Secretary of State Antony Blinken gave a glimpse of President Biden’s classified strategy on China on Thursday, saying the U.S. does not seek to sever China from the global economy, but wants it to adhere to international rules.
U.S. stocks rose sharply overnight to extend gains from the previous session, as Elon Musk committed more cash to the Twitter deal, and retailers such as Department store operator Macy’s Inc, discount chains Dollar General Corp and Dollar Tree posted strong set of quarterly results and issued upbeat guidance.
Economic readings were mixed, with initial jobless claims falling more than expected last week, while first-quarter GDP contracted at slightly faster rate than previously expected and pending homes sales slipped in April.
The Dow climbed 1.6 percent, the tech-heavy Nasdaq Composite soared 2.7 percent and the S&P 500 rallied 2 percent.
European stocks also closed higher on Thursday, as the latest FOMC minutes offered no surprise on rates and Britain revealed new stimulus plans.
The pan European Stoxx 600 advanced 0.8 percent. The German DAX gained 1.6 percent, France’s CAC 40 index jumped 1.8 percent and the U.K.’s FTSE 100 rose 0.6 percent.
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