European Shares Seen Up As US Government Shutdown Worries Ease

(RTTNews) - European stocks are likely to open higher on Friday amid signs the U.S. may avert a looming government shutdown after Senate Democratic leader Chuck Schumer announced he's ready to start the process of considering a Republican-led government funding bill that has fiercely divided Democrats.

That said, volatility cannot be ruled out in the wake of lingering trade tensions and skepticism about the potential for a 30-day ceasefire between Russia and Ukraine.

As trade tension mount, there are now increased expectations of the Federal Reserve easing monetary policy.

The U.S. economic calendar remains light, with the University of Michigan's preliminary report on consumer sentiment and inflation expectations in March likely to garner some attention later in the day.

Closer home, monthly GDP estimate, industrial production and foreign trade figures from the U.K. are due later in the session.

Germany has officially introduced a significant infrastructure fund and exempted defense spending above 1 percent of GDP from debt limits.

The outgoing lower house of parliament will vote on the measures on March 18 before the formation of a new parliament on March 25.

Asian stocks were mostly higher, with Chinese and Hong Kong markets leading regional gains on optimism surrounding China's advances in artificial intelligence.

The dollar held firm, and the euro pulled further away from a five-month peak following U.S. President Donald Trump's escalated tariff rhetoric against the European Union.

Treasuries were steady after rallying in the prior session. Gold slipped after hitting a record high on safe-haven demand.

Oil pared weekly losses as the U.S. tightened sanctions against Iran and Russia, helping offset a dour demand forecast from the International Energy Agency.

U.S. stocks tumbled overnight to reach six-month lows as President Trump's latest tariff threats stoked concerns about the outlook for inflation and economic growth.

In the latest in a long list of tariff threats, Trump said he would impose a 200 percent tariff on all wines, champagnes and alcoholic products coming out of the EU in response to a "nasty" 50 percent tariff on whisky, which was imposed as a counter measure to previous levies announced by the U.S.

The S&P 500 fell 1.4 percent to enter correction territory, while the Dow dropped 1.3 percent and the S&P 500 shed 1.4 percent.

In economic releases, U.S. producer prices were unexpectedly unchanged in February while weekly jobless claims remained roughly in line with pre-pandemic levels.

European stocks ended mixed on Thursday following Trump's comments that reciprocal tariffs on U.S.' trade partners will take effect next month.

Also, doubts emerged over U.S.-brokered truce in Ukraine as Russian President Putin stressed that any deal must address the root causes of the conflict.

The pan European STOXX 600 slipped 0.2 percent. France's CAC 40 rose 0.6 percent and the German DAX gained half a percent while the U.K.'s FTSE 100 ended on a flat note.