European stock markets are set to open higher on Friday, as the generally positive handover from the U.S. and Asia keeps growing concerns about the new winter wave of Covid-19 at bay.
Germany's federal and state governments agreed on Thursday to introduce sharp new restrictions on unvaccinated people in response to the surge in cases that has taken the rate of new infections to 30% above its peak last winter. However, they set a threshold for generalized lockdowns at a rate considerably higher even than the current one.
German and Eurozone markets were set for a test of nerve after shocking producer price inflation numbers for October that showed prices rising another 3.8% on the month, taking the annual rate of factory gate inflation in Europe's largest economy up to 18.4%. The euro edged down to $1.1355 in response. French data also showed unemployment rising more sharply than expected to 8.1% of the workforce in October.
In the U.K., FTSE 100 futures were up 0.4% after GfK's latest consumer confidence index unexpectedly rose to -14 from -17 in October. Analysts had expected it to inch down, but figures released earlier in the week had shown that there had been no major rise in unemployment in October after the end of the government's job-protecting furlough scheme.
U.K. retail sales also rebounded more strongly than expected in October, by 0.8%, further fleshing a picture of an economy that is strong enough to withstand a modest increase in interest rates by the Bank of England. Even excluding fuel, where sharp price rises and reports of shortages triggered panic buying in October, sales rose 1.6% on the month.
In corporate news, retailer Kingfisher (LON:KGF) heads a slimmed-down list of companies reporting. Late on Thursday, Vivendi (PA:VIV) announced that it will support the plans for a two-tier share structure at Italy's Mediaset (OTC:MDIUY), effectively drawing a line under a five-year battle for control with the Fininvest holding company of Silvio Berlusconi.
Later Friday, the U.S. House of Representatives is set to vote on the Democratic Party's $2 trillion spending bill after Speaker Nancy Pelosi finally appeared to have overcome internal divisions in her party. Wall Street is set to end the week on a mixed note, with broad confidence in the U.S. economy only partly dimmed by pockets of uncertainty. Alibaba (NYSE:BABA) became the latest high-profile company to miss market expectations with its quarterly results on Thursday, but mainland Chinese stocks shrugged off the development on Friday, with all the major indices rising after the People's Bank of China warned against speculators putting bullish bets on the yuan.
In oil markets, U.S. crude futures recovered overnight but are still on course to end the week lower as the U.S., China and India plot a coordinated release of strategic petroleum reserves. WTI was up 1.0% at $79.20 a barrel, while Brent was up 1.0% at $82.06. Gold futures were down 0.1% at $1,859.75 an ounce.