Europe Markets

FTSE, CAC, DAX to Open Flat; Euro Near 16-Month Low


European stocks were called to open flat on Friday after indexes in Asia edged down overnight and the euro remained close to a 16-month low against the dollar and 11-year low against the yen.

Financial spreadbetters predicted Britain's FTSE 100 to open 3 to 7 points lower, Germany's DAX to open 2 points higher to down 6 points and France's CAC 40 to open up 1 point to down 3 points.

Declines in the euro have fuelled investor concerns that the euro zone might not be able to resolve the debt crisis and European banks are finding it increasingly difficult to raise capital and withstand the pressure of exposure to sovereign debt.

On Wall Street stocks ended the day mixed on Thursday, rebounding from losses earlier in the trading day.

US non-farm payrolls data is due on Friday and investors will be hoping it follows two job reports on Thursday that showed encouraging improvements in the number of unemployment benefit claims and planned layoffs by firms.

The euro fell below $1.28 against the dollar on Thursday and remained close to $1.2770, its lowest level since September 2010, in overnight Asian trade.

A French bond auction on Thursday saw yields rise on 10 to 30-year bonds as fears of a downgrade to France's triple-A credit rating meant investors demanded greater returns for their bond purchases.

France sold 7.96 billion euros ($10.2 billion) of long term bonds, a day after a German 10-year bond sale attracted limited interest.

French Budget Minister Valerie Pecresse told CNBC the bond auction was "reassuring". She stressed that France had a "sound economy" and was "a safe place to invest".

US crude oil futures fell on Thursday as the dollar gained in strength and fresh data showing a rise in US oil supplies eased concerns over Iran.

Turkish Foreign Minister Ahmet Davutoglu delivered a message to the Iranian administration from the West, urging Iran to return to the negotiating table over its nuclear program.

At a press conference, Iran's foreign minister Ali Akbar Salehi joined Davutoglu and suggested Tehran was interested in renewing negotiations which stalled a year ago.

The FT reported on Friday that Anglo-Dutch oil giant Shell will end its UK final salary pension scheme to new employees from 2013. Shell was the last of the FTSE 100 listed companies to offer such a scheme and the firm said on its website that the closure of the scheme "(reflects) market trends in the UK."

Key economic data out of Europe on Friday includes European Union unemployment and retail trade data due at 10:00am UK time.

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