European markets expected to close the week on higher note

During this rollercoaster week, European equities followed Wall Street's lead as investors reacted to a combination of factors, such as the possibility that inflation in the US has peaked while also Federal Reserve chairman Jerome Powell's warning that the US economy still needs a lot of work to get back to where it was.

US job market

In the latest data from the US Bureau of Labor Statistics released on Thursday, the number of Americans filing for unemployment benefits rose to 203,000 last week, the highest level in three months. The number was higher than the 195,000 predicted, and the 202,000 reported the previous week. However, it continues to be a strong job market despite a surprise rise in new unemployment benefit claims last week, as demand for workers doesn't seem to be significantly shifted.

The Labor Department reported on Thursday that the number of people on the rolls of state unemployment benefits in April was at the lowest level recorded in more than 52 years. Attempting to fill record job openings, companies are boosting wages, which contributes to inflation.

US PPI trend

The slowing down in monthly producer price gains follows the same trend observed in consumer prices last month. The annual increase in consumer prices has slowed for the first time since August,

Among the recent data, the US Producer Price Index (PPI), released on Thursday, showed a growth of 0.5% month-on-month in April, a lower figure than the 1.6% increase in March due to easing pressure from rising energy costs.

In April, core producer prices excluding food, energy and trade services rose by 0.6%, after increasing by 0.9% in March. The core PPI increased by 6.9% in the 12 months through April after rising by 7.1% in March.

In April, economists expect the core price index to rise by 0.2% after climbing by 0.3% in the previous two months. It would mean that the rate of increase on a year-on-year basis would slow down from 5.2% in March to 4.7%.

Oil and gold down

On the commodities front, while prices for crude oil continued to rise on Friday morning, the commodity's price looks to be heading for its first weekly decline in three weeks. This was because worries about inflation and China's COVID lockdowns were causing global growth to stall, offsetting concerns about dwindling Russian fuel supplies.

The price of gold also dropped on Friday as the dollar strengthened over the Federal Reserve's tightening monetary policy.

Events of today

Investors will be paying close attention to Friday's inflation numbers for both France and Spain, looking for signs that the European price rises may be slowing down. The figures for Eurozone industrial production in March will also be closely scrutinized by investors, which is expected to shrink by 2% monthly following a rise of 0.7% in February.