All in on reopening

ALL IN ON REOPENING (0755 GMT)

Soft demand and weak economic activity remain a drag on China as the world's second-biggest economy slowly but surely shakes off its COVID restrictions. The path to reopening is unlikely to be smooth and straight-forward, with some finding it difficult to break out of habits formed during the strict lockdowns.

Investors though are riding on the reopening optimism. An index of Chinese gambling stocks (.CSICESG10) is up more than 60% in two weeks, all while the spectre of an economic slowdown looms large. Next week's slate of central bank meetings will show us which way the interest rates are headed.

With market events scarce until next week, the spotlight will firmly be on U.S. producer price inflation figures later in the day for more clues about the health of the U.S. economy.

Meanwhile, Keystone pipeline in the United States was shut down after more than 14,000 barrels of crude oil spilled into a creek in Kansas. Yet oil remains pinned near one-year lows, as gloom about demand offsets the Ukraine war's strain on supply.

The cause of the leak is unknown and is the third spill of several thousand barrels of crude on the pipeline since it first opened in 2010.

In the corporate world, Microsoft's MSFT $69 billion deal to acquire "Call of Duty" maker Activision Blizzard (ATVI.O) faces antitrust blowback with the U.S. Federal Trade Commission moving to block the biggest ever gaming industry deal.

Key developments that could influence markets on Friday:

Economic events: U.S. PPI data for November, Norway CPI data for November

Speakers: ECB's Christine Lagarde, Deputy Governor of the Riksbank Per Jansson

(Ankur Banerjee)

*****

STOXX ON TRACK FOR FIRST WEEKLY LOSS IN TWO MONTHS (0745 GMT)

European equity markets are set to gain about 0.5% at the open, futures indicate, but are still on track for their first weekly loss in two months as the market awaits US PPI data later today.

Eurostoxx 50 FESX1! and DAX DAX1! futures are up around 0.45% with FTSE 100 Z1! futures up 0.2%, tracking an uplift in Asian markets earlier in the day.

The STOXX 600 has gained for the past seven weeks but as of yesterday's close was 1.7% lower on the week, on track for its worst week in ten.

Data showed China's producer prices falling and consumer inflation slowing on soft demand, though there are hopes that the country's shift in COVID policy will allow the economy to pick up.

Eyes will be on shares in Primark owner Associated British Foods ABF which on Friday reiterated a November forecast that profit would fall in its 2022-23 financial year.

Meanwhile Manchester United MANU raised its 2023 total revenue guidance on the back of strong matchday revenue and British high-end homebuilder Berkeley Group Holdings BKG retained its annual profit outlook on Friday.

(Lucy Raitano)

*****