European stocks up; German factory orders highlight economic risks

By Peter Nurse – European stock markets traded higher on Friday as momentum generated by a positive tone in Asia on the reopening of speculation in China overshadowed weakness in German factory orders.

At 04:40 ET (08:40 GMT), the DAX futures contract in Germany was trading up 0.7%, the CAC 40 futures contract in France climbed 0.8% and the FTSE 100 futures contract in the Kingdom United rose 0.7%.

European stocks received a boost from strong gains in Asia on Friday following renewed speculation of an imminent easing of China’s COVID-19 restrictions, potentially boosting economic activity in the world’s second-largest economy and a major market in China. European export.

The Hang Seng Index in Hong Kong closed more than 5% higher, while China’s blue-chip Shanghai Shenzhen CSI 300 Index jumped 3.2% and the Shanghai Composite Index jumped 2, 6%, both trading around three-week highs.

Such a change would be positive for the global economy, a boost that Europe particularly needs due to a collapse in German factory orders suggested that the eurozone’s largest economy is rapidly heading into recession.

New data showed orders for Germany’s key manufacturing sector slumped 4.0%, their sixth drop in the past seven months and the biggest drop since March.

Services Eurozone activity data is due later in the session and should show that this sector remains firmly in contraction territory.

The key data release for the day, however, will be the US payrolls report, which is expected to show that non-agricultural payroll increased by 200,000 jobs in October. An upside surprise could cement another big Fed hike in December.

In the corporate sector, Societe Generale SA (EPA:SOGN) shares rose 4.2% after the third-listed French bank joined its European rivals in posting higher-than-expected net profit in the third quarter, the market volatility that boosted trading revenue.

Telefonica Inc (BME:TEF) stock rose 1.9% after the Spanish telecom operator reiterated its full-year financial guidance and dividend commitments despite headwinds from the surge in inflation and slowing economic growth.

Oil prices rose on Friday, helped by a falling dollar and fresh speculation that China plans to ease COVID-related restrictions, as traders await news on whether a price cap will be passed on Russian exports, a plan to cut funding from Moscow without cutting off supply to consumers.

Reuters reported Thursday evening that the G7 nations and Australia had agreed to set a fixed price when they finalize a price cap on Russian oil later this month, rather than adopt a floating rate.

As of 4:40 a.m. ET, U.S. crude futures were trading up 2.2% at $90.13 a barrel, while the Brent contract was up 2% at $96.56.

Both benchmarks are on course for a positive week, with supply seen as tight, illustrated by falling US crude inventories, even as recession fears raise demand worries.

Additionally, gold futures were up 1.2% at $1,649.80 an ounce, while EUR/USD traded up 0.3% at 0.9778.

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