European stock markets are expected to open marginally higher Friday, with Renault (PA:RENA) in the spotlight, but concerns surrounding China, one of the world’s main growth drivers, remain.
French car giant Renault will be in focus Friday, helping the CAC 40 outperform, after it announced late Thursday that it would cut up to 2,000 engineering and support jobs in France as it shifts into electric cars and hires in different positions.
Staying with corporate news, advertising agency S4 Capital reports half-year earnings while Primark owner Associated British Foods (OTC:ASBFY) issues a trading update.
Elsewhere, U.K. retail sales surprisingly fell 0.9% on the month in August, a far weaker result than the gain of 0.5% expected, with consumers spending less at food stores and more on hospitality, services and motor fuel as the economy reopened.
The August consumer price index for the Eurozone is due later in the session, with the number expected to rise to 3.0% on an annual basis, a sharp rise from July’s 2.2%, and a full percentage point above the central bank’s target.
The Financial Times reported Thursday that ECB chief economist Philip Lane revealed in a private meeting with German economists that the ECB only expects to hit its 2% inflation goal by 2025, a forecast that implies a long wait before the bank's first interest rate hike.
Chinese data earlier this week suggested growth in the world's second-largest economy will slow in the second half of this year, and this is occurring while Beijing increases its regulatory supervision on a variety of different sectors, also potentially weighing on growth.
Adding to the concerns, the risk of markets turning disorderly in China grew as real estate giant China Evergrande Group (HK:3333) lurched closer to default, its stock falling 10% in the process.
The People’s Bank of China responded by injecting 90 billion yuan ($13.9 billion) of funds into the banking system in an attempt to soothe market nerves, the first time this month that more than 10 billion yuan of short-term liquidity had been added in a day.
Crude prices weakened Friday as supply slowly comes back online in the hurricane-hit U.S. Gulf of Mexico region, but losses are small as the recovery in output is still seen lagging demand.
As of Thursday, about 28% of Gulf crude production - over 510,000 barrels a day - remained offline, more than two weeks after Hurricane Ida hit.