European and US equity futures advanced on Friday, following gains in Asian markets as traders increased their exposure to risk assets amid rising optimism that the US economy will steer clear of a recession. The yen, meanwhile, is on track for its worst weekly performance since May.
Futures contracts on the Euro Stoxx 50 climbed 0.3%, while those on the S&P 500 added 0.2%, extending the momentum from Wall Street’s overnight gains. Asia’s benchmark equity index is set to achieve its best weekly performance in over a year, driven by strong performances in Japanese shares.
The yen’s weakness has bolstered exporters’ earnings, with the currency falling 1.3% against the dollar on Thursday and trading around the 149 level, alleviating concerns over a potential massive carry trade unwind.
This week’s slew of US economic data, including inflation figures, jobless claims, and retail sales, has bolstered investor confidence. The data supports the view that the world’s largest economy is heading for a “Goldilocks” scenario, where inflation is contained without stalling economic growth.
The global stock market rally has largely erased the losses incurred last week when concerns grew that the Federal Reserve might not reduce interest rates quickly enough to prevent a recession.
The renewed optimism has prompted traders to re-enter the market, pushing equity prices higher and signaling confidence in the resilience of the US economy. As investors continue to monitor economic indicators and central bank policies, the current momentum suggests that the global markets are positioned for further gains, driven by the belief that economic growth will persist without significant inflationary pressures.
