Stock markets closed the session at three-month highs on Friday afternoon with traders reacting to comments from central bankers in the euro zone and the U.S. The Dax was up around 3.9 percent for the week and tracked its best week since the week ending October 23 when the DAX gained 6.83 percent.
Traders are coming to terms with the possibility that the U.S. Federal Reserve will hike interest rates in December. But in Europe, policymakers are talking about further easing measures. The ECB’s chief economist, Peter Praet, signaled on Thursday that further stimulus measures could be possible, while the central bank’s president Mario Draghi struck a dovish tone in a speech he delivered on Friday morning. In the US, some FOMC members indicated that a rate hike is coming.
U.S. crude held support at above 40$ a barrel while Brent futures gained about 1 percent. A firmer dollar had weighed on oil earlier as commodities denominated in the greenback became less affordable to holders of other currencies such as the euro.Crude prices were supported as well by the latest weekly reading on the U.S. oil rig count, which showed a drop of 10 rigs this week. The data, compiled by industry firm Baker Hughes, is an indication of U.S. oil production in coming months.
While the EURUSD is almost 0,75% down on the day, the greenback is not doing as well against other currencies. AUD is especially buoyant despite fundamentals suggesting otherwise. The JPY has barely moved following a slightly dovish monthly report from the BoJ.
The market now focuses on the upcoming week with the revised GDP from US as the main event.