European markets slightly higher with China reopening, economic outlook in focus

European markets continued their subdued trade on Friday, as investors hope for a Chinese economic recovery as Covid-19 curbs are relaxed, while assessing the prospects for global recession.

The pan-European Stoxx 600 index was up 0.2% by mid-morning, with construction and material stocks adding 0.9% to lead gains while oil and gas fell 0.8%.

After a relatively muted week for European stock markets, a host of significant risk events are coming down the pike next week, including the U.S. Federal Reserve and Bank of England’s next monetary policy meetings.

The Fed is expected to issue a 50 basis point interest rate hike — smaller than the last four increments of 75 basis points — but investors are increasingly concerned about whether the central bank can avoid a recession next year in its attempt to rein in inflation.

Shares in Asia-Pacific were higher overnight, with Hong Kong’s Hang Seng index leading gains, as Chinese November inflation data came in roughly in line with expectations.

In remarks published by state media on Thursday, Chinese Premier Li Keqiang said the country’s easing of Covid policy would allow the economy to gather momentum.

U.S. stock futures were modestly higher in early premarket trade on Friday as traders look ahead to fresh wholesale inflation data due later in the day.

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