European equities rose on Friday, positioning themselves for weekly gains as investors embraced a risk-on stance amid expectations of further Federal Reserve easing, even as the U.S. government shutdown entered its third day.
At 07:05 GMT, Germany’s DAX advanced 0.4%, France’s CAC 40 gained 0.4%, and the U.K.’s FTSE 100 rose 0.3%, after hitting a record high earlier this week. The pan-European Stoxx 600 reached an all-time peak on Thursday, marking its fifth straight day of gains and putting it on track for a weekly increase of more than 2%.
Global Sentiment Supports European Markets
Despite uncertainty caused by the U.S. government shutdown, European markets, like Wall Street, have been buoyed this week as investors focused on the Federal Reserve’s potential interest rate cuts. The shutdown has paused the release of official data, including the widely watched nonfarm payrolls report, but weak preliminary jobs data has reinforced expectations that the Fed may implement two further rate reductions this year, including one at the end of October.
Investors have also taken comfort from historical trends showing that government shutdowns have generally not derailed market performance, although U.S. Treasury Secretary Scott Bessent noted in a Thursday interview that the shutdown could have a negative impact on the country’s economic growth.
Eurozone PMI Data in the Spotlight
Attention in Europe is shifting to regional economic activity, with investors looking for insights into how tariffs under the Trump administration might be affecting growth. The HCOB eurozone composite PMI is anticipated to show a modest expansion in September, indicating continued growth in business activity.
Meanwhile, the European Central Bank is expected to maintain interest rates at the current level for the third consecutive meeting on October 30, despite inflation in the 20-country eurozone rising to 2.2% in September from 2.0% in August.
Corporate Updates
In corporate news, J D Wetherspoon (LSE:JDW) highlighted that rising labor, energy, and packaging costs are likely to weigh on profits this financial year, even as the U.K. pub chain reported higher revenue and earnings for the year ended July 27.
Roche (BIT:1ROG) announced that Claudia Suessmuth Dyckerhoff will not seek re-election to the Swiss pharmaceutical company’s board. Dyckerhoff, a board member since 2016, is stepping down after being nominated to serve on the board of another healthcare firm.
Oil Prices Set for Weekly Decline
Oil markets rose on Friday, but both Brent and U.S. West Texas Intermediate benchmarks are on track for their steepest weekly losses since late June. Brent futures added 1.1% to $64.78 per barrel, while WTI rose 1.1% to $61.16 per barrel.
In the previous session, both benchmarks fell nearly 2% to their lowest levels since early June and are poised for a roughly 8% decline over the week. Concerns over a potential OPEC+ production increase of up to 500,000 barrels per day in November—three times November’s current output addition—kept investor sentiment cautious.
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