Europe close: Stocks boosted by strong US data, weak euro
European stocks rallied into the close on the back of a stronger than expected read on US retail sales and consumer confidence for the month of April and a weaker euro.
The benchmark DJ Stoxx 600 closed higher by 0.47% or 1.57 points to 334.68 – snapping a two-week losing streak, alongside a gain of 0.92% or 90.78 points for Germany's Dax taking it to 9,952.90 and a 0.62% or 26.72 point rise in the Cac-40 which was at 4,319.99.
Shares of retailers led gains, with the Stoxx 600 sector gauge finishing the session up by 1.10% to 307.06.
US retail sales jumped by 1.3% month-on-month in April, surpassing forecasts for a 0.8% gain by a wide margin. Excluding automobiles they also came in ahead of forecasts, rising by 0.8% (consensus: 0.6%).
Together with a stronger-than-forecast reading on US consumer confidence, investors were able to brush aside hawkish Fedspeak from overnight.
On Thursday evening, Boston Federal Reserve Bank President Eric Rosengren, who typically has a 'dovish' slant suggested he could back a June interest rate increase if recent economic trends continue, Market News International reported.
Keeping interest rates "too low too long" could lead to excessive speculation, he added.
Adding to cautious sentiment, on Friday the International Monetary Fund warned Brexit might set off volatility in financial markets, resulting in "sharp" drops in home and equity prices, impacting economic growth and erode London's standing as a financial centre.
Weather Gods not behind German GDP
On a more positive note, Germany's economy expanded in the first quarter of the year more quickly than economists had predicted, with gross domestic product expanding at a 0.7% quarter-on-quarter clip (consensus: 0.6%).
The data, which showed household and government spending offsetting weak demand from overseas, left economists divided on the outlook in its wake.
"Looking at the so far available G7 data shows that Germany even outpaced its peers. It is true that special circumstances, such as the mild winter weather (and hence construction), additionally boosted GDP growth.
“However, such fault-finding misses the point. Even if the weather god had not been on our side the recovery would have gathered pace. The German economy is in the midst of a regime change towards more domestic demand," was the verdict from Andreas Rees, chief German economist at UniCredit Research.
Eutelsat burns on re-entry
French construction and telecommunications outfit Bouygues reiterated its full-year guidance, helping to send its stock up by 3%.
Eutelsat shares plunged after the satellite operator cut its 2016 and 2017 profit forecasts, weighing on shares of its rival Inmarsat.
Euro/dollar retreated sharply, moving 0.73% to 1.1292, weighed down by the 'hawkish' Fed rhetoric and upbeat economic data Stateside, while front month Brent crude futures were off by 0.57% to $47.81 per barrel on the ICE.