By Peter Nurse
Investing.com – European stock markets are seen edging higher at the open Friday, amid optimism that the ongoing global vaccination program will restore the region’s economy – notably in the U.K. – and speed the earnings recovery.
At 2:05 AM ET (0705 GMT), the contract in Germany traded 0.2% higher, in France climbed 0.4%, and the contract in the U.K. rose 0.1%.
The euro zone has been hard hit by the second wave of the Covid-19 pandemic, with the region’s GDP falling by 0.7% in the final quarter of 2020 as governments introduced new restrictions and lockdowns to try to curb the virus.
Growth in the first quarter of the new year is also likely to be negative, but there is hope ahead. The Bank of England, for example, while keeping its Thursday, said the U.K. economy, one of the hardest hit in Europe, is heading for a rapid pickup in light of a bold vaccination effort.
“With Covid-19 cases now declining in certain regions, including the U.S. and the U.K., there will be a glimmer of hope that the worst is now behind us, particularly as the rolling out of vaccinations picks up,” said analysts at ING, in a research note.
Additionally, more U.S. stimulus looks likely to become available in the next few weeks, while drugmaker Johnson & Johnson (NYSE:) asked U.S. regulators to clear its experimental Covid-19 vaccine for emergency use on Thursday, potentially adding to the group of available drugs to combat the virus.
Corporate earnings have been reasonably solid so far this season, and this is set to continue Friday after BNP Paribas (OTC:) provided upbeat guidance for 2021, helped by strong trading figures in the fourth quarter of last year.
On the economic data front, German fell 1.9% in December, a sharp drop from the revised 2.7% gain the previous month, as lockdowns hurt the manufacturing sector in Europe’s powerhouse.
However, the focus will be on the official U.S. later in Friday’s session, with job growth expected to have rebounded in January as authorities began easing restrictions on businesses.
Oil prices firmed Friday, reaching their highest levels in a year on optimism of future economic growth as well as the continued commitment by major producers to curb supply.
futures traded 0.7% higher at $56.61 a barrel, after touching a high of $56.84, its highest since Jan. 22 last year, and is on track for a weekly gain of nearly 9%, which would be its biggest weekly gain since October.
The international benchmark contract rose 0.3% to $59.19, after hitting a high of $59.41, its highest since Feb. 20 last year, and on track to rise 6% this week.
Elsewhere, rose 0.4% to $1,799.20/oz, while traded 0.1% higher at 1.1967.