LONDON
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U.S. futures pointed to a slightly positive open on Wall Street SPc1, after the S&P 500 .SPX hit an all-time high on Thursday.
A batch of soft manufacturing data on Thursday from the United States, China and Germany pointed to sluggish global growth but cemented investor hopes that central banks will keep stoking activity.
Federal Reserve Chair Janet Yellen will take centre stage later on Friday. Earlier this week Fed meeting minutes appeared to push the timing of the first U.S. rate hike out to late 2015, while the ECB's Benoit Coeure said the euro zone bank could increase its bond purchases in the near term.
"There are chances of more rate cuts in China, the
Fed is delaying its rate hikes and Europe is treading a steady course so the risks are on the limited side for the market," said ABN Amro Chief Investment Officer Didier Duret.
"We are seeing the tail of the slowdown in the United States in the first quarter, meaning it is probably the last set of data that are rather negative."
By 1155 GMT the FTSEuroFirst 300 index .FTEU3 was down 0.2 percent, with luxury goods group Richemont (CFR.VX) falling on weak sales. Britain's FTSE 100 .FTSE was up 0.6 percent at its highest level in 10 days in the wake of a better-than-expected improvement in UK public finances.
Earlier, Wall Street's record high helped China's main index to leap nearly 3 percent to a fresh 7-year high, rounding off a weekly gain of 8 percent, its strongest week this year. It has risen 45 percent in only six weeks.
MSCI world equity index .MIWD00000PUS, which tracks shares in 45 countries, was up 0.2 percent at 443.54, close to a record high of 443.98 hit in April.
BONDS STEADYING
U.S. inflation data for April is due at 1230 GMT. Muted price pressures are expected to give the Fed more breathing space regarding of the timing of what will be its first rate hike since June 2006.
The U.S. economy's recovery has not been as robust as expected. U.S. data released overnight appeared to vindicate the Fed officials' cautious policy stance.
With weaker-than-expected existing home sales, manufacturing sector and U.S. Mid-Atlantic business activity, U.S. Treasury yields fell, helping nudge the dollar away from recent highs.
The euro rose 0.6 percent to $1.1175 EUR=, shrugging off data showing German business morale deteriorated slightly in May for the first time in seven months. It had hit a three-week low of $1.1062 earlier this week amid Greek debt concerns and was poised to lose almost 2.5 percent on the week, snapping a five-week winning streak.
The dollar also eased slightly to 120.975 yen JPY= after scaling a two-month peak of 121.49 midweek.
The benchmark 10-year German bond yield fell four basis points to 0.60 percent DE10YT=TWEB and the 10-year U.S. yield to 2.17 percent US10YT=RR.
Analysts at Barclays noted "tentative" signs that the euro zone bond market was stabilising after a rout that drove Bund yields to 0.80 percent from 0.05 percent. That high is unlikely to be retested any time soon.
"Were financial conditions to tighten further, the ECB
could respond more forcefully," they said in a note on Friday.
Oil prices slipped on Friday as worries over the impact of war in the Middle East on crude supplies were outweighed by reports of profit-taking ahead of a long weekend. [O/R]
Brent LCOc1 was down 45 cents at $66.09 a barrel after closing up 2.3 percent on Thursday.
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