European markets inch higher as global sentiment rebounds

September 14,2021: -On Friday, European markets were cautiously higher, tracking global counterparts as sentiment rebounded after a rocky week.

The pan-European Stoxx 600 edged 0.3% higher in the trade but is still on track to end the week in the red. Household goods increased 0.7%, while telecoms stocks fell 0.6%.

Shares in Asia-Pacific increased trade as Hong Kong-listed stocks affected by the regulatory crackdown of China bounced back after potential further action from Beijing on gaming companies was revealed not to be as harsh as first reported.

Stateside, stock index futures were higher in premarket trading after Wall Street notched a fourth consecutive day of losses on Thursday.

On Thursday, weekly jobless claims figures indicated that the U.S. labor market recovery is remaining on track, as the number of initial unemployment filings of the previous week decreased to 310,000, the lowest for almost 18 months.

On Thursday, European investors continue to digest the European Central Bank’s decision to slow down bond-buying under its pandemic emergency purchase program (PEPP) in response to higher inflation and more robust GDP growth across the eurozone. The ECB also modestly revised up its medium-term inflation forecasts.

“We counted at least four decisions which we will have to come back in December for, on top of the pace of PEPP for Q1 2022: the future of PEPP beyond March, a possible new round of cheap loans to the banks, and possible technical adjustments to the asset purchase programs to ensure it can last for longer,” said HSBC economists Simon Wells and Fabio Balboni.

“For now, the relatively dovish upward revision to the inflation forecast should reassure markets that a good support is coming.”

In a piece of different news, finance ministers from the Group of Seven significant economies said Thursday that they need to make more technical progress on global corporate tax reform plans.

Germany’s finance and justice ministries were raided as prosecutors investigated the anti-money laundering agency of the government, casting doubt over failings to tackle financial crime in Europe’s largest economy.

On Friday, eurozone finance ministers will meet in Ljubljana, Slovenia, for informal talks.

On Friday, the data front, the U.K. economy rose just 0.1% in July, official statistics showed, as the spread of the delta variant of Covid-19 slowed economic activity to a trickle after the easing of lockdown measures.