European stock markets surged on Friday, buoyed by robust U.K. economic growth figures that surpassed expectations. At 03:05 ET (07:05 GMT), Germany’s DAX index climbed 0.4%, France’s CAC 40 rose 0.5%, and the U.K.’s FTSE 100 ascended 0.4%.
The positive momentum was fueled by renewed optimism surrounding potential rate cuts by the U.S. Federal Reserve, enhancing overall market sentiment.
Adding to the upbeat atmosphere, recent data unveiled Britain’s resilient economy, which expanded by a notable 0.6% in the first quarter of 2024, surpassing forecasts of 0.4%. This growth effectively lifted the nation out of the shallow recession it had entered in the latter half of the previous year.
March’s monthly economic growth also exceeded expectations, registering a 0.4% increase compared to the anticipated 0.1%.
While the Bank of England maintained interest rates at a 16-year high in its recent meeting, the indication of a potential rate cut gained traction as two members of the nine-person committee advocated for a reduction. This sentiment aligns with market expectations, with money market traders pricing in a 45% probability of a rate cut in the upcoming policy meeting and approximately 58 basis points of easing anticipated by year-end.
Furthermore, investors are eagerly awaiting the European Central Bank’s release of its last monetary policy meeting’s account, seeking insights into the timing and extent of future rate cuts.
In the corporate arena, IAG (BME:ICAG) shares surged by 2% following the airline group’s robust operating profit of €68 million for the first quarter, a substantial increase from €9 million during the same period last year. The parent company of British Airways, Iberia, and Aer Lingus expressed confidence for the upcoming peak summer travel season.
Meanwhile, Mediobanca (OTC:MDIBY) shares soared by 3% after the Italian lender reported a remarkable 42% surge in net profit for the January-March period on an annual basis. The company also announced its intention to distribute a €421 million interim dividend this month.
In the commodities market, crude oil prices rallied, poised for a weekly gain, buoyed by optimistic demand outlooks from the U.S. and China, the world’s leading crude consumers. At 03:05 ET, U.S. crude futures surged 0.9% to $79.94 per barrel, while the Brent contract climbed 0.7% to $84.50 per barrel. This positive trajectory follows a challenging prior week, with both contracts set to achieve approximately 2% gains for the week.
The uptick in crude prices was fueled by encouraging overall import data from China, coupled with a decline in U.S. crude inventories, indicating improving global oil demand.
Additionally, gold futures surged by 1.5% to $2,376.40 per ounce, while EUR/USD maintained stability, trading flat at 1.0782.
