Friday's newspaper headlines were all about the cost-of-living crisis hitting home for consumers in the UK, but it was retailers that were leading stock market gains at midday.
In London, the FTSE 100 index was up 12.72 points, or 0.2%, at 7,528.40 midday Friday. The mid-cap FTSE 250 index was up 118.14 points, or 0.6%, at 21,278.21. The AIM All-Share index was up 2.11 points, or 0.2%, at 1,044.47.
The Cboe UK 100 index was down 0.1% at 749.21. The Cboe 250 was up 0.6% at 18,759.41, and the Cboe Small Companies flat at 15,345.38.
In mainland Europe, the CAC 40 stock index in Paris was up 0.6%, while the DAX 40 in Frankfurt was up 0.5%.
Investor focus lies on Friday's US jobs report, due out at 1330 BST. The US is expected to have added 490,000 jobs in March, according to FXStreet consensus, which would be down from 678,000 in February.
A beat on the jobs front could see investors firm up expectations for a 50-basis-point rate hike at the next Federal Reserve policy meeting.
‘Against the background of a healthy labour market and lingering inflation, the case for an increasingly hawkish Fed builds up...In such a scenario, there is scope for further dollar gains, especially versus the Japanese yen, as the Bank of Japan shows no interest in shifting its dovish stance, and versus the euro, as the European Union's energy crisis and dependency on Russian supplies remains a cause for concern,’ said Ricardo Evangelista, senior analyst at ActivTrades.
Ahead of the data, Wall Street was pointed to a higher start. The Dow Jones and S&P 500 were both called up 0.5% and the Nasdaq Composite pointed up 0.6%.
In addition, the dollar rose against major currency pairings heading into the data release.
Sterling was quoted at $1.3132 on Friday, lower than $1.3155 at the London equities close on Thursday. The euro traded at $1.1052, down from $1.1111 late Thursday. Against the yen, the dollar was up at JP¥122.42 versus JP¥121.43.
Gold struggled against the stronger dollar. The precious metal was quoted at $1,933.80 an ounce on Friday, lower than $1,941.55 on Thursday.
Not helping the pound was data showing UK factory growth faded in March as firms struggled with supply shortages and customers grew cautious amid inflationary pressures and geopolitical tensions.
The S&P Global/Chartered Institute of Procurement & Supply manufacturing purchasing managers' index declined to 55.2 points in March, a 13-month low, from 58.0 in February. The reading was below March's flash estimate of 55.5.
The story was similar in the eurozone, with manufacturers seeing output ease in March as the war in Ukraine weighed on confidence and supply chains.
‘Just as the fading of the latest pandemic wave was creating a tailwind for the eurozone manufacturing recovery, with economies re-opening and supply chain bottlenecks easing, the war In Ukraine has created an ominous new headwind,’ said Chris Williamson, chief business economist at S&P Global.
S&P Global's eurozone manufacturing PMI declined to 56.5 points in March from 58.2 in February, signalling the slowest improvement in operating conditions since the start of 2021.
And compounding inflationary worries, official figures showed cost prices in the bloc are set to hit a fresh record in March. The annual inflation rate is expected to accelerate to 7.5% in March from 5.9% in February, in large part due to a hefty 45% increase in energy prices.
Energy prices, already boosted as economies across the globe re-opened from Covid lockdowns, have been further propelled in recent weeks following Russia's invasion of Ukraine.
A barrel of Brent was quoted at $105.10 a barrel midday Friday, down from $108.02 late Thursday.
In London, retailers led the FTSE 100 higher despite worries that, as a cost of living crisis begins to bite in the UK, consumers' disposable income will come under pressure.
Athleisurewear seller JD Sports and clothing retailer Next rose 2.7% and 2.3% respectively, while DIY retailer Kingfisher rose 1.8%.
A 54% increase to Ofgem's price cap hits energy bills from Friday. The regulator was forced to hike the cap to a record £1,971 for a typical household as gas prices soared to unprecedented highs.
Shares in British Gas parent Centrica were down 2.0%, while SSE was down 0.3%.
There was also some positive corporate news from the retail sector. Sports Direct-owner Frasers Group rose 3.6% after unveiling new buyback programme that will run until late-April.
A share repurchase programme worth up to £70.0 million begins on Friday and ends on April 24, the day before the retailer ends its financial year. The new programme follows a buyback of the same amount it kicked off in December. Frasers also had announced a £70.0 million buyback in October, as well as a £60.0 million one back in May of last year.
On AIM, shares in Quiz jumped 35% after the fashion retailer said it expects to report an annual profit, helped by revenue coming in ahead of expectations.
For the financial year that ended on Thursday, Quiz expects to post revenue of £78.0 million, which would top expectations and be up 96% from £39.7 million from the year prior.
‘Positive sales momentum’ it saw over the Christmas period continued into the final quarter of its financial year.
At the top of the FTSE 250 was insurer Lancashire Holdings, up 4.7% after Citigroup raised the stock to 'buy' from 'neutral'.
By Lucy Heming; lucyheming@alliancenews.com
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