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A SOUPCON OF OPTIMISM (0635 GMT)
European share futures pointed to small gains at the open, helped by hopes a deal is in sight to raise the U.S. debt ceiling for two years, respite for long-only investors after three straight sessions of losses for the STOXX 600 benchmark.
U.S. negotiations are still ongoing, but the two sides are just $70 billion apart, Reuters reported, citing an unnamed official.
Eurostoxx 50 futures rose 0.3%, and FTSE 100 futures rose 0.17%. Asian stocks are also trading higher.
There were a few company announcements for investors to keep an eye on.
Volkswagen and its Audi unit have agreed to an $85 million settlement in principle over violations of Texas environmental laws stemming from its diesel cheating scandal, Texas Attorney General Ken Paxton said on late Thursday.
Credit Suisse should soon repay the emergency liquidity that the Swiss government gave the stricken bank to aid its rescue, Finance Minister Karin Keller-Sutter said in an interview published on Friday.
The owners of supermarket Asda and petrol stations company EG Group will announce a 10 billion-pound ($12.6 billion) merger of their operations in Britain as early as Friday, Sky News reported on Thursday.
Investors will be watching for what that means for Asda's listed peers, Tesco and Sainsbury's.
Meanwhile, one trend that has gone somewhat under the radar is long-unloved telecom stocks are showing signs of life.
(Alun John)
COUNTING DOWN THE $70 BLN TO A DEBT DEAL
The week draws to a close with pretty much the same buzz around artificial intelligence and U.S. debt diplomacy that it kicked off with.
Stock markets were getting a breather after the excitement over the blowout forecast from chipmaker Nvidia Corp and the follow-through rally in AI-related companies, which powered the Nasdaq's best day in three weeks.
Japan's Nikkei maintained its momentum, however, after data showed inflation again well above policy targets and as foreign money poured into the market.
But all eyes are on the U.S. debt ceiling debate, where it looks like President Joe Biden and top Republican lawmaker Kevin McCarthy are just $70 billion apart on discretionary spending, according to a person familiar with the talks.
The deal's going down to the wire, which itself is a moving target. Treasury's announcement of a slate of bill auctions for early next week had some market participants suggesting the debt ceiling's so-called "X-date", when the government runs out of cash, may not in fact be June 1. Figures on Thursday showed that Treasury's cash balance is down to just $49.47 billion.
The deal is not final, and work requirements for anti-poverty programs are a sticking point as is funding for the Internal Revenue Service to hire more auditors and target wealthy Americans. But funding for discretionary spending on military and veterans is on, as per sources.
Meanwhile, markets are growing less confident that the Federal Reserve will keep rates on hold in June. The CME FedWatch Tool now puts the chances of a quarter-point rate rise to 5.25-5.50% on June 14 at more than 50%.
Main economic indicators on Friday include the U.S. Commerce Department's personal consumption expenditures (PCE) price index figures for April, which could show a small rise similar to March.
Key developments that could influence markets on Friday:
U.S. PCE price index
ECB's Philip Lane and Croatian central bank Governor Boris Vujcic speak at events