Despite ongoing geopolitical tensions, stock markets found support in the narrative of further interest rate cuts, while the market also kept a close eye on a potential ruling from the U.S. Supreme Court regarding tariffs.
Analysts at Renta 4 highlighted in their morning report that the main focus of the day would be the official U.S. employment report (1330 GMT), for which a Reuters poll forecasts the creation of 60,000 jobs in December and an unemployment rate of 4.5%.
"This data will be especially relevant, along with December's CPI (next Tuesday…) for the decision the Fed will make at its next meeting (January 28), where the market assigns just a 15% probability of a 25 bp cut, not fully pricing in the next rate reduction until June and a total of -50 bp for the year (in line with R4e) despite pressure from Miran (calling for -150 bp) and Bessent," they explained, referring to two Fed members advocating for more aggressive rate cuts.
"These estimates could change with the imminent appointment of Jerome Powell's successor as head of the Fed," they added.
The other major unknown of the day comes from the judicial sphere, where a possible Supreme Court ruling on tariffs in the United States could, if overturned, reduce government revenues, push Treasury yields higher, and trigger new waves of market volatility.
On the geopolitical front, investors are digesting developments in Venezuela following the capture of President Nicolás Maduro by U.S. President Donald Trump last Saturday.
Trump said on Thursday that Venezuelan opposition leader María Corina Machado would travel to Washington next week, while Caracas began the process of releasing a "significant number" of detainees.
Elsewhere, unrest in Iran is raising concerns over oil production and stability in the Middle East, while anxiety persists over the ongoing war between Russia and Ukraine and fears over the U.S. threat to take Greenland, a situation pitting Washington against Brussels.
At 0815 GMT on Friday, Spain's IBEX 35 index was up 51.80 points, or 0.29%, at 17,706.50 points, marking the highest closing level in its history. Should it finish at current levels, it would be the IBEX's first close above 17,700 points.
Meanwhile, the pan-European blue-chip index FTSE Eurofirst 300 was up 0.43%.
In the banking sector, Santander gained 0.61%, BBVA rose 1.44%, Caixabank advanced 1.82%, Sabadell was up 0.33%, Bankinter increased 0.96%, and Unicaja Banco climbed 0.58%.
Among the large non-financial stocks, Telefónica fell 0.69%, Inditex rose 0.25%, Iberdrola slipped 0.29%, Cellnex dropped 2.22%, and oil company Repsol gained 0.89%.
(Reporting by Tomás Cobos; editing by Benjamín Mejías Valencia)
