European Shares Seen Opening Up; US Jobs Data Eyed

(RTTNews) - European stocks may see modest gains at open on Friday after Federal Reserve Chair Jerome Powell said the U.S. central bank is getting close to the confidence it needs to start lowering interest rates.

Cleveland Fed President Loretta Mester reiterated on Thursday that there could be a likelihood of rate cuts later in the year, but there is no urgency to act right yet.

According to the CME FedWatch Tool, the likelihood of rate cuts in May and June currently stands at 25.5 percent and 56.7 percent, respectively.

Asian markets were sharply higher amidst the backdrop of a weakening U.S. dollar and falling bond yields across the curve.

Gold was marginally lower after a record-breaking rally. Oil ticked higher after falling in the previous session on China demand concerns and uncertainty about the outlook for interest rates.

Trading later in the day may be driven by reaction to the Labour Department's monthly jobs report for February.

Economists expect employment to jump by 200,000 jobs in the month after an increase of 353,000 jobs in January. The unemployment rate is expected to come in unchanged at 3.7 percent.

In Europe, industrial production data from Germany and revised quarterly national accounts from the euro area are awaited.

U.S. stocks rose overnight to extend gains from the previous session while the ten-year yield fell to its lowest closing level in a month after Powell told a U.S. Senate committee that the U.S. central bank is "not far" from gaining the confidence it needs in falling inflation to begin cutting interest rates.

In economic releases, weekly jobless claims came in unchanged, the U.S. trade deficit widened more than expected in January and labor costs edged up less than expected in Q4 while worker productivity grew solidly in the fourth quarter.

The S&P 500 rallied 1 percent to reach a record closing high, while the tech-heavy Nasdaq Composite jumped 1.5 percent and the Dow inched up 0.3 percent.

European stocks closed on a firm note Thursday as the European Central Bank lowered its annual inflation forecast and signaled it won't begin cutting rates before June.

The pan European STOXX 600 climbed 1 percent. The German DAX climbed 0.7 percent, France's CAC 40 added 0.8 percent and the U.K.'s FTSE 100 edged up 0.2 percent.