European shares were set to rise on Friday after sharp gains on Wall Street and in Asian equities on growing optimism that a key U.S. jobs report will confirm an upbeat outlook for the recovery in the country's labor market.
Expectations that euro zone interest rates could rise earlier than anticipated rattled equity investors on Thursday, with shares in peripheral states hit hardest on concern higher rates would hit fragile recovery.
European Central Bank President Jean-Claude Trichet signaled a rate hike could be just a month away, sending the euro sharply higher.
"I guess by the end of the year we'll be at 0.75 percent," Stefan Schneider, chief international economist at Deutsche Bank told CNBC.
Spain raised euro3.8 billion ($5.25 billion) in an oversubscribed auction of 3- and 5-year bonds Thursday, but at higher interest rates that reflected investor worries over public finances in Europe.
Those concerns intensified after Trichet's comments, with investors concerned over the impact of a rate hike on struggling euro zone countries.
Oil prices will remain in focus Friday as the turbulence in Libya continues to determine market movements. Muammar Gaddafi increased the use of force to regain control of parts of Libya on Thursday.
Investors have little in the way of economic data to digest Friday in Europe. Spain releases Jauary industrial production numbers and UK Frebruary car registations are also due. Attention will shift to the US February employment report later in the day for further information on the health of the economy.