Risk-off mood weighs on safe-havens

European stocks were set for their best week in seven months on Friday in the wake of a good earnings season that helped ease investor concern about higher inflation.

Eurozone consumer prices fell in September in France and Italy, the second and third economies in the eurozone, while new car registrations fell about 20% on the continent due to chip shortages and other components in short supply.

After a strong rebound in risk appetite on Thursday, higher-yielding currencies were supported against safe-havens in early European trade on Friday, resulting in a slightly lower dollar and gold.

USDJPY advanced to fresh multi-year highs, with bulls now poised to push the momentum further past 114,400. For the first time in seven months, the Japanese government slashed its view on exports in the October economic report, saying the pace of economic recovery is slowing down. This outcome comes after a risk-on mood prevailed in the financial markets, pushing the yen lower for the second day in a row as a safe-haven currency.

While the US dollar and Treasury yields rebound in tandem amid an upbeat market mood, gold prices retreat from monthly highs of $1800. Strong earnings by US corporations reduce investor concerns over inflation risks, making gold less appealing as a safe-haven investment. As traders await US data, gold is slipping toward its support at 1779.

Bitcoin keeps rally on

And finally, the prospect that the US regulators may soon approve Bitcoin ETFs has boosted bullish sentiment, with bulls keeping 66K in sight. It looks like Bitcoin will cruise over 60K this weekend and might even break all-time highs.

Events of the day

This week's economic data concludes on a consumer-focused note, with the release of September retail sales figures at 15:30 EEST and the Michigan Consumer Sentiment index at 17:00 EEST.

Sales indexes are expected to decline modestly, with a continued shift away from goods to services. The Michigan report will focus on the inflation expectations component, which only slightly retreated from a 10-year high in September.