European stock markets closed higher on Friday as traders digested U.S. economic data as well as the start of earnings season.
The pan-European Stoxx 600 index provisionally closed 0.53% higher, its fourth consecutive positive session. It takes its gains for the week to 1.15%, according to Eikon data.
European markets
Banking was the top sector, up 3% after results from U.S. banks JPMorgan, Citigroup and Wells Fargo beat estimates.
Utilities dropped 1.5% to lead losses.
The U.S. producer price index for March, a measure of prices paid by companies, declined by 0.5% from the previous month. Meanwhile, retail sales were down by 1%, adding to expectations that the Federal Reserve will pause its current rate-hiking cycle.
On Wednesday, data showed U.S. consumer price inflation had cooled.
The readings suggest a 25 basis point Fed hike in May, said James Knightley, chief international economist at ING, in a note. Financial markets are pricing in around an 82% probability of this, according to CME's FedWatch Tool.
"We think that will be the last hike though, given the headwinds facing the consumer sector are intensifying and inflation pressures are easing," said Knightley. "Indeed, rising job lay-off announcements, higher borrowing costs and tighter lending conditions (which will hit credit card spending and car loans in particular) plus falling house prices are never a good combination for consumer spending."
U.S. stocks were down slightly despite the banking results, while Asia-Pacific markets largely rose on Friday.
