European Shares to Open Flat; ECB Conference Expected
European shares are indicated to open flat Friday, ahead of a conference at the European Central Bank in Frankfurt later in the morning.
Federal Reserve Chairman Ben Bernanke will make a keynote speech, followed by a panel discussion with ECB President Jean-Claude Trichet and Managing Director of the International Monetary Fund, Dominique Strauss-Kahn.
Bernanke reiterated the case for the Fed to act now in the text of the speech for delivery to the conference released ahead of the event.
Stocks closed higher on Thursday, lifted by hopes of a solution to Ireland's debt crisis and results from a Spanish debt auction,while carmakers were boosted after General Motors successfully returned to the US market.
The Spanish Treasury sold a combined 3.6 billion euros in 10-year and 30-year bonds, beating the mid-point of a 3 billion to 4 billion euros target.
Yields rose 50 basis points on both papers compared with equivalent auctions in September, but an analyst said the outcome showed buyers took a relatively positive view of Spain's prospects compared with other struggling economies in the single currency area.
Macroeconomic data on the agenda on Friday includes German producer prices for October and Industrial turnover and orders for Italy in September.
Ireland remains a cause for concern, with markets hopeful that a solution to the country’s debt problems will be found soon. A bailout is looking increasingly likely.
Ireland's central bank chief said on Thursday he expected Dublin to receive tens of billions of euros in loans from European partners and the IMF to provide contingency capital for its shattered banks.(Link)
General Motors’ share offering had a strong debut on Thursday. The stock closed at $34.19, above the initial public offering price of $33.
GM CEO Daniel Akerson told CNBC Thursdaythe group aims to eliminate all debt from its balance sheet and make its European operations profitable by 2012. To that end, capacity needs to be reduced in Europe, he said.
"Europe is a really important economic region in the world. The blueprint that we executed upon in North America is the one we're going to use in Europe," Akerson said.
Investors will also be keeping an eye on BayeronFridayafter the company said after the market close on Thursday it would book a one-time charge of about 1 billion euros, part of which would be incurred in the fourth quarter of 2010. It also plans to axe some 2,000 jobs by 2012 to cut costs.