Europe Calm Ahead of Summit; U.S. Labor Data in Focus

European and U.S. markets open with risk-on sentiment; investors focus on EU summit, Davos event, jobless claims, and PCE inflation.

European markets begin the session with a positive tone, supported by improved risk sentiment after the United States stepped back from a proposed tariff escalation announced earlier this week. The easing of trade-related concerns has reduced immediate uncertainty for global markets.

The main political event in Europe is an emergency summit of EU leaders. However, authorities scheduled the meeting before the latest de-escalation on trade, and investors do not expect any major policy announcements or decisions that could influence markets in the near term.

Attention will also turn to events in Davos, where U.S. President Donald Trump will participate in signing an international peace initiative focused on conflict resolution. Despite its diplomatic significance, the event will not directly impact financial markets.

Europe Calm Ahead of Summit; U.S. Labor Data in Focus

Overall, European trading is likely to reflect the improved global risk backdrop, with investors focusing more on sentiment than on policy developments.

In the American session, markets will focus on U.S. labor market data, starting with the weekly Jobless Claims report. Initial Jobless Claims are expected to rise to 209,000 from 198,000 in the previous reading, while Continuing Claims are forecast to edge up to 1.89 million from 1.884 million.

Recent data have suggested a labor market characterized by limited layoffs and subdued hiring. However, the latest reports have shown some improvement, raising the possibility of increased labor market activity in the near term.

Investors will also review the U.S. Personal Consumption Expenditures (PCE) price index, the Federal Reserve’s preferred measure of inflation. Because markets can already infer the figures from earlier CPI and PPI releases, and because the data refer to November, the release is unlikely to trigger a strong market reaction.

As a result, U.S. trading is expected to remain driven primarily by labor market trends and overall risk sentiment rather than by inflation data.

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