Global shares, oil dip but head for best week since November

By Marc Jones

LONDON (Reuters) - European shares and oil prices dipped on Friday at the end of what looked set to be their best week since November, while the dollar eased on caution ahead of first quarter growth data from the world's biggest economy.

A growing expectation that the European Central Bank will react to the recent slide in economic data by shaving another 0.25 percent off its already record low interest rates next Thursday has seen European stocks jump 4 percent this week.

The central bank will publish its monthly update on money supply, lending trends and bank deposit data at 0800 GMT with all likely to be weighed by policymakers.

"Investors are implicitly placing further faith in the ECB to deliver monetary support at next week's meeting," Ian Williams, strategist at Peel Hunt, said.

"There remains scope for disappointment on that front with at least a 25 basis point repo rate cut priced into risk assets," he said.

As investors took a breather after five days of gains, Europe's top shares on the FTSEurofirst 300 <.fteu3> opened 0.4 percent lower as London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> dropped 0.1, 0.5 and 0.1 percent respectively.

Asian equity markets had seen a steady end to the week after the Bank of Japan kept its monetary policy steady on Friday, a widely expected move after it unveiled aggressive stimulus measures earlier this month.

The data highlight of the day comes later when the United States publishes its first quarter economic figures.

U.S. gross domestic product is forecast to have grown at a 3 percent annual rate, but if the number falls short of the mark it could stoke concerns about loss of momentum as the impact of automatic government spending cuts kicks in.

The dollar, which had been pressured against the yen throughout the Asian session by profit-taking and yen-buying by Japanese exporters, was down 0.15 percent against a basket of currencies <.dxy> as European trading gathered momentum.

The euro was up 0.1 percent at $1.3028 as it continued to edge away from this week's three-week low of $1.2954.

European bond markets have seen a general rise in the appetite for riskier euro zone periphery bonds this week as the prospect of an ECB rate cut has firmed and Italy showed the first signs of emerging from its recent political stalemate.

Safe-haven German Bunds started the day higher on Friday though, with investors still aware that talks to form a government in Italy could be derailed by major differences between the country's main political parties.

Prime Minister-designate Enrico Letta said early-stage talks to form a government after February's inconclusive election were "encouraging", but noted problems in reaching a deal with the Silvio Berlusconi-led centre-right.

In the oil market, Brent crude eased back below $103 a barrel after rising $3 in the past two sessions, with investors cautious over the tepid outlook for growth in the world's two largest oil consumers, the United States and China.

"We know what is happening in Europe but we're uncertain about growth prospects in China and the U.S. and that's probably also why Brent is underperforming," said ANZ analyst Natalie Rampono.

(Additional reporting by David Brett and Florence Tan in Singapore; Editing by Peter Graff)

Source: http://news.yahoo.com/asian-shares-steady-u-earnings-data-004016703--finance.html

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