European stock markets ended a choppy day in positive territory on Friday, tracking U.S. markets higher as a spate of positive data gave traders a reason to shake off concerns over another impending prominent departure from the White House.
The euro declined against the dollar after disappointing inflation figures and the U.S. data, providing a lift to Europe’s big exporters.
How did benchmarks perform?
The Stoxx Europe 600 index DAX, +0.36% ended up 0.2% at 377.71, trimming its weekly decline to 0.1%.
Germany’s DAX 30 index DAX, +0.36% rose 0.4% to 12,389.58. Trading in Frankfurt opened about 40 minutes late on Friday after a connectivity issue that prevented equal access for market participants to the trading system.
France’s CAC 40 index PX1, +0.29% climbed 0.3% to 5,282.75, while the U.K.’s FTSE 100 UKX, +0.34% closed up 0.3% at 7,164.14.
Read: Pound could surge in ‘frenetic’ week of Brexit and BOE news, ING says
What was driving the market?
European markets had been all over the map on Friday, but decisively moved higher after upbeat data from the U.S. There, industrial production rose the most in four months in February, while the University of Michigan’s consumer-sentiment index jumped to a 14-year high in March. U.S. stocks also traded higher.
The encouraging data spurred a rally in the dollar, in turn yanking the euro EURUSD, -0.1219% . The shared currency bought $1.2289, compared with $1.2306 late Thursday in New York. A weaker euro can help boost European companies as products and services become cheaper for other currency holders.
The euro had already trimmed its earlier gain in mid-morning Europe trade after data showed eurozone inflation in the currency union fell to 1.1% in February, down from an initial estimate of 1.2% and weaker than the 1.3% recorded in January. Weaker inflation could deter the European Central Bank from rolling back its aggressive quantitative-easing program later this year.
Turmoil in the Trump administration added to Friday’s volatile trade, with the U.S. president expected to fire his national security adviser H.R. McMaster, according to news reports, which would be the second high-profile firing from the White House this week. Secretary of State Rex Tillerson was replaced with Central Intelligence Agency Director Mike Pompeo on Tuesday.
White House press secretary Sarah Huckabee Sanders dismissed that suggestion in a tweet late Thursday, but administration officials have reportedly confirmed it.
Concerns over a possible trade war between the U.S. and key trading partners were still weighing on investors’ minds as well, analysts said. The White House said on Wednesday it will seek to trim the U.S.’s trade deficit with China by $100 billion, using tariffs. The European Union, meanwhile, was working to get the bloc exempt from the tariffs.
Which stocks were in focus?
Shares of Siemens Healthineers AG SHL, +0.00% rose 5% as the stock made its market debut on the Frankfurt Stock Exchange.
NEX Group PLC NXG, +30.35% rallied 30% after confirming that it’s received a preliminary takeover approach from CME Group Inc. CME, -0.16%
Altice NV ATC, +2.73% rose 2.7% after the debt-laden telecoms company late Thursday said underlying earnings rose in the fourth quarter and that it was seeing some recovery in the French market.
Berkeley Group Holdings PLC BKG, -5.35% dropped 5.4% as the home builder said while trading conditions in London and the southeast of the U.K. remain stable it doesn’t plan to step up building.
What were strategists saying?
• “The fear that the U.S. and China would engage in a trade war weighed on stocks during the week, but that uncertainty has lifted for now. As it is potentially going to be a U.S.-instigated trade war, European dealers are taking their cues from U.S. indices,” said David Madden, market analyst at CMC Markets UK, in a note.
• “The latest [inflation] data only strengthens the belief that we will see significant monetary policy divergence between the U.S. and eurozone this year,” said Jacob Deppe, head of trading at Infinox, in a note.
“In fact, monetary policy could open a new front in a U.S./eurozone trade war. European exports, reliant on a cheap Euro, will benefit from a continuing dovish monetary policy,” he added.
