European Stocks Set for Positive Open

European equity markets were poised for a modestly higher open on Friday following a two-session decline, as the recent surge in oil prices and global bond yields lost momentum, offering some relief to investors. Market participants also awaited a key US inflation reading that could influence expectations for a Federal Reserve rate hike next week. On Thursday, the European Central Bank delivered its widely anticipated quarter-point rate increase, while President Christine Lagarde highlighted upside risks to inflation and downside risks to economic growth. Investors will now turn to UK GDP figures and German current account data for July for further clues on the region’s economic health. No major earnings reports are scheduled. In premarket trading, Euro Stoxx 50 and Stoxx 600 futures were both up around 0.2%.

European stocks moved lower on Thursday, with both the STOXX 50 and STOXX 600 falling 0.3%, reversing early opening gains and extending losses of more than 1% in the previous session. Investors assessed the ECB’s latest policy decision, with policymakers raising rates by 25bps as expected while upgrading their growth and inflation forecasts. The ECB also warned that the Middle East conflict was continuing to fuel inflationary pressures, with inflation expected to remain above target for an extended period. Meanwhile, oil prices continued to rise, with Brent trading above $102 a barrel. Technology stocks were among the worst performers ahead of Oracle’s earnings, which are expected to provide further clues on the AI outlook. ASML fell more than 2%, while SAP declined 2.5%.

European stocks edged higher on Thursday, with the STOXX 600 gaining around 0.2% and the STOXX 50 also up 0.2%, following losses of more than 1% in the previous session. Investors await the ECB’s monetary policy decision later in the day, with markets widely expecting a 25bps rate hike. The focus will be on ECB President Christine Lagarde’s guidance on the policy outlook, particularly whether policymakers signal that further rate increases could be needed as inflationary pressures intensify. Surging energy prices have complicated the outlook, with Brent crude trading above $101 a barrel. Banking stocks were among the stronger performers, with Societe Generale rising around 1.6%, Deutsche Bank gaining 1.3% and Banco Santander adding 0.7%. In contrast, the tech sector was under pressure, with ASML losing 1.1%. SAP was among the biggest decliners, falling around 3%.