While the big movers and shakers in Friday’s session were coming mostly from corporates that have reported earnings, investors are also gearing up for news out of the European Central Bank and European Banking Authority, who are expected to release the latest set of results from its stress tests, due out after the close.
The main aim of the “stress tests” are to see how resilient the banks in Europe are, especially with the latest Brexit result taking a toll of the continent’s lenders. More than 50 banks are expecting results, with the majority believed to meet approval.
“There is currently a great deal of attention on Brexit as well as the Italian banking crisis, so the ECB will be hoping that the stress tests reveal that the banks are in a position to cope with adverse trading conditions,” Nitin Rakesh, CEO and president of Syntel, told CNBC.
On the data front, euro zone gross domestic product (GDP) rose 0.3 percent quarter-on-quarter (compared to a 0.6 percent expansion seen in 2016’s first quarter), while unemployment remained unchanged at 10.1 percent in June. Inflation in July also increased slightly, coming in at 0.2 percent year-on-year, according to Eurostat.
Elsewhere, the euro spiked against the U.S. dollar during Europe’s afternoon trade. This comes as data from the U.S. showed that its economy had grown far less than expected in the second quarter, with GDP increasing at an annual rate of 1.2 percent, below market expectations. Consequently, the data plus earnings saw U.S. markets traded mostly mixed on Friday.