Europe Markets

FTSE, DAX, CAC Seen Higher on Bond Auction Success


European stocks were called to open higher on Friday tracking Asia overnight where shares rose to a one-month high and the euro was boosted by successful Spanish and Italian bond auctions on Thursday.

Close-up of a pen on stock price chart

The FTSE is called 29 points higher, the DAX in Frankfurt is expected to be up by 46 points and the CAC 40 is called higher by 20 points.

On Wall Street, stocks ended Thursday higher after a day of thin trade and the Dow Jones Industrial Index rose by 21.57 points led by the materials and industrials sectors.

Spain managed to sell 4.2 billion euros in a new 3-year issue bond on Thursday, well in excess of the amount targeted.  The troubled European nation raised twice the amount expected in the tender, causing yields to fall.

An auction of Italian 12-month bonds also exceeded expectations on Thursday with yields hitting their lowest levels since June 2011. Investors will be hoping for more good news on Friday when Italy offers 2-3 billion euros in 3-year bonds at an auction scheduled for 10:00 UK time.

The euro was buoyed by the successful tenders in Spain and Italy and after a week which saw the common currency hit a 16-month low. The euro rallied on Thursday and clung onto gains in Asian overnight trade.

IMF chief Christine Lagarde said on Thursday that Hungary will need to take "tangible steps" to calm its economy before negotiations on a possible loan can take place.  Lagarde urged the Hungarian administration "to engage on all the policy issues that are relevant to macroeconomic stability" after meeting with officials from the EU country.

British Finance Minister George Osborne struck an optimistic tone on Thursday saying he believes the UK economy will improve in 2012.  In an interview with UK-based ITV News, Osborne said he expects inflation to fall in the coming months, but he conceded that further turmoil in the euro zone would have a negative impact on Britain.

European Commission, ECB and IMF officials will arrive in Greece on Sunday to review the government's latest economic measures to drive down the deficit.  The visit is the first quarterly mission to the country this year the EU-IMF-ECB 'troika' will consider Greece's latest round of austerity measures and spending cuts.

The Swiss National Bank will release its preliminary full-year results at 6:30 GMT in an otherwise quiet day for corporate and economic data.