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(Sharecast News) - Stock markets across Europe were making moderate gains on Friday, though upside was limited as investors exercised caution ahead of this week's highly anticipated risk event - Federal Reserve Chair Kevin Warsh's address at the Jackson Hole symposium.
The Stoxx 600 was up 0.4% at 654.54, with most major indices across the continent making gains.
Warsh is expected to give a speech at 1500 BST to a host of central bankers and finance ministers and is under pressure to give markets a clue about the near-term direction of interest rates.
Ipek Ozkardeskaya, senior analyst at Swissquote, said Warsh's speech is "particularly important" because it's his first Jackson Hole event as Fed chair and comes at a time of elevated inflation and long-term bond yields.
Investors were awaiting news on how the Fed will respond to last week's intervention in the bond market by the Treasury, which ramped up its purchases of long-term bonds to tame borrowing costs, Ozkardeskaya added.
"The stakes are high. Kevin Warsh must say something, and what he says - or doesn't say - will probably move the market, potentially in a considerable way," she said.
Inflationary risks were firmly on investors' minds in Europe on Friday after economic data released showed signs of rising price pressures in France, Spain and Germany on the back of a renewed surge in energy prices.
The annual rate of consumer price inflation in France jumped to a three-month high of 2.4% in August, Spanish inflation hit a three-year high of 4.3%, while German import prices surged 6.8% year-on-year in July, marking the highest rate since late-2022.
Nevertheless, oil prices were lower on Friday, pulling back after a jump on Thursday following comments from Donald Trump, who said he was not interested in reviving the June ceasefire agreement with Iran. Brent was 0.3% lower at $88.27 a barrel.
Corporate news was thin on the ground in Europe on Friday, though Strabag was a big mover, with shares in the Austrian construction outfit up 14% after an upgrade to its full-year profit guidance. The bright outlook followed a 12% increase in output volumes in the first half and a record order backlog.
In the UK, defence contractors BAE Systems and Babcock both lost ground on news that new chancellor John Healey will delay setting out when the UK will meet the target of spending 3% of GDP on defence until next year's spending review.