European markets close higher on hopes of a US-China trade agreement; banks in the spotlight 

Key Points
  • European markets enjoyed a boost from a suggestion that a U.S.-China trade deal is in progress. 
  • Trump said that trade "discussions are moving along nicely."
  • There was also focus on European banks, with the European Banking Authority due to release its latest stress test results.

Shares in Europe jumped on Friday on hopes of a trade agreement between China and the United States.

The pan-European Stoxx 600 closed provisionally 0.33 percent higher with the bulk of sectors in positive territory at the last check. After a tricky October, the benchmark is reportedly now having its best week since December 2016. Autos and banks were among the best-performing sectors.

President Donald Trump said Thursday that there has been progress in trade talks with China. He also said that trade "discussions are moving along nicely."

Looking across the European benchmark, Luxury retailers were among those leading the gains, with Moncler and Kering both finishing up by more than 5 percent.

At the same time, investors are monitoring further corporate results. Erste Group Bank reported third quarter results with a beat on net profit. However, the stock had dropped 1.2 percent by the close of Friday.

There is also quite a lot of focus on European banks, with the European Banking Authority is due to release its latest stress test results at 5 p.m. London time. The Italian lender Banco BPM rose above 3 percent, ahead of the results and Ubi Banca was also higher by 3.3 percent. The Italian banking system is under special scrutiny on the back of the recent turmoil in the country's politics.

Another bank in focus is Deutsche Bank. The embattled German lender also awaiting results of the stress tests. On Friday, Jamie Dimon, J.P. Morgan's chief executive officer has said it has no interest in buying Deutsche Bank, Handelsblatt reported.

In terms of data, the euro zone saw factory data growing at the weakest pace in more than two years in October, due to lower export orders.

Meanwhile in the U.S., jobs numbers beat expectations in October and year-over-year wage gains jumped past 3 percent for the first time since the Great Recession.