European stock markets are poised for a positive opening on Friday, buoyed by recent confirmations of a US-UK trade agreement and growing anticipation surrounding crucial trade negotiations between the United States and China scheduled to commence this weekend.
Investor focus will also be firmly on corporate earnings, particularly from the banking sector, and fresh trade data out of China.
Early indicators point towards modest gains across the continent.
Futures data from FactSet suggests the pan-European Stoxx Europe 600 index could open approximately 0.3% higher.
Similarly, the UK’s FTSE 100 is anticipated to rise by 0.3%, while Germany’s DAX and France’s CAC 40 are projected to open with gains of around 0.2%.
This follows a generally positive close for most major European indices on Thursday, although the UK’s FTSE 100 bucked the trend, slipping 0.32% and thereby snapping its remarkable record winning streak which had ended on Wednesday.
China trade data beats expectations amid tariff pressure
Adding to the complex global picture, fresh trade data released from China on Friday morning offered a surprising upside. China’s exports surged by 8.1% in April (in US dollar terms) compared to the previous year, significantly beating Reuters’ poll estimates of a 1.9% rise.
This robust export performance occurred even as Chinese businesses began to more fully absorb the impact of heightened US tariffs that took effect last month.
Meanwhile, Chinese imports showed a narrowing decline, falling just 0.2% year-on-year in April, considerably better than economists’ expectations of a 5.9% drop.
This suggests that Beijing’s efforts to stimulate domestic demand may be gaining some traction. Asian-Pacific markets traded mixed on Friday as investors parsed this new data.
Earnings in focus: Commerzbank shines
Corporate earnings remain a key driver of market sentiment.
German lender Commerzbank delivered strong first-quarter results on Friday morning, reporting a 12% year-on-year increase in net profit to 834 million euros ($937 million).
This figure comfortably surpassed analyst expectations of 738.5 million euros (LSEG data) and marked the bank’s highest quarterly profit since 2011.
Revenues also rose 12% to 3.1 billion euros, ahead of the 2.96 billion euros anticipated by markets.
Commerzbank reaffirmed its full-year guidance, aiming for a net profit of 2.8 billion euros in 2025 (expected to be 2.4 billion euros after restructuring).
Both Commerzbank and Italy’s Mediobanca (also reporting earnings) have recently been subjects of takeover speculation involving UniCredit.
Investors will also be digesting results from Portuguese utility EDP, which faced scrutiny after a major power outage earlier in the month.
Global cues: Wall Street futures muted
Overnight on Wall Street, market sentiment was somewhat subdued.
Futures tied to the Dow Jones Industrial Average fell 52 points (0.1%), while Nasdaq 100 futures slipped 0.08%, and S&P 500 futures were off about 0.1%.
This slight caution in US futures followed a period of strong gains earlier in the week, partly driven by hopes for progress in trade negotiations and some reassuring comments from Federal Reserve officials.
As European markets open, the interplay between robust Chinese export data, key corporate earnings, and the overarching anticipation of the US-China trade talks in Switzerland will likely shape trading dynamics.
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