LONDON Today's G7 summit takes place in a Sicilian resort at the foot of Mount Etna, still officially Europe's most active volcano.
What that augurs for the atmospherics of Donald Trump's latest encounter with fellow leaders remains to be seen, but Thursday's NATO meeting certainly saw some sparks fly. Allies were shocked at Trump's move to use the talks to publicly chide them over shortfalls in defence spending and were dismayed that he did not give as explicit a reassurance of Washington's commitment to the alliance as they were seeking.
Then there was the body language ... a cringeworthy moment when Trump shoved aside the leader of Montenegro to get to the front of a photo shoot; and before that, his protracted handshake battle with France's Emmanuel Macron. The G7 will provide ample opportunity for similar moments as well as debate on the more serious stuff - notably safeguarding the Paris accord on climate change and what to do about global trade.
The first poll taken since the Manchester attack shows the Conservatives' lead over Labour narrowing further ahead of the June 8 election, showing the controversy over Theresa May's manifesto pledge to means-test social care took its toll.
On the flip side, May's personal ratings have improved against those of Labour leader Jeremy Corbyn, suggesting her strategists are right in wanting to focus the race on public doubts over Corbyn's leadership. He is due to resume campaigning today with a speech criticising police cuts and drawing a link between British interventionism abroad and militant attacks.
MARKETS AT 0755 GMT
Oil and sterling are the main movers in markets on Friday. OPEC and some non-member producers agreed to extend output cuts for nine months but that was widely expected and priced in. After falling 5 percent on Thursday, Brent crude is down a further 0.3 percent. Oil-related stocks fell sharply on Wall Street but not enough to prevent the S&P 500 and Nasdaq hitting record closing highs.
The other standout is the British pound, down 0.5 percent against the dollar after a poll showing the ruling Conservatives’ lead over Labour down to just 5 percentage points ahead of a June 8 general election. After topping $1.30 earlier this week, it is trading around $1.2880.
The dollar is marginally weaker against a basket of other top currencies, with the yen up 0.4 percent at 111.35. The euro is flat at $1.1211.
European shares are expected to open slightly lower. The main STOXX index dipped on Thursday but remains close to 21-month highs after a forecast-beating earnings season. A long weekend in Britain and the United States may limit activity. MSCI’s main index of Asia-Pacific shares excluding Japan is down 0.2 percent and a stronger yen helped push Tokyo stocks down 0.6 percent.
Post-OPEC disappointment is not expected to have much impact on European shares while the drop in the sterling is seen supporting the FTSE only marginally. The STOXX 600 index is up 0.1 percent so far this week.
There is little major corporate news to focus on and big moves are likely to concentrate on mid cap stocks.
In Germany, shares in Manz are indicated down more than 3 percent after the high-tech supplier said Shanghai Electric had not exercised an option to buy shares in the group by a May 24 deadline and make a full takeover offer.
Markets will keep an eye on oil services firm Petrofac and Tanzania-focused miner Acacia Mining. Both stocks suffered losses of more than 30 percent this week on the back of separate investigations. Jefferies cut its price target on Acacia by 40 percent this morning, keeping a hold rating, while Credit Suisse, RBC and Barclays more than halved their targets on Petrofac.
Other possible stock movers: California says VW clean car spending plan has shortcomings; UK prosecutors delay charging decision on Barclays Qatar fundraising to mid-June.
Softer oil and commodity prices weigh on emerging markets, with stocks trading a touch softer on Friday, snapping a 5 day winning streak that nonetheless leaves them on track for a near-2 percent gain over the week. Brent crude prices, on track for a more than 4 percent tumble after an OPEC agreement to extend cuts in crude production for a further nine months disappointed investors, weighed on some markets.
Currencies are broadly flat against the dollar, which found a more solid footing. However, many major emerging currencies, such as the rouble, South Africa’s rand, Mexico’s peso and China’s yuan are on track for a third straight week of gains against the dollar as investors continue to favour emerging markets. The yuan is on track for its biggest weekly gain since early December.
S&P will review sovereign credit ratings of Burkino Faso; Moody’s reviews Bulgaria, Kuwait, Qatar. Fitch reviews Tunisia.
Copper is flat at $5,724 a tonne but there is concern about further disruption at the Grasberg mine in Indonesia. Gold is up 0.3 percent at $1,259 an ounce.
(Editing by Louise Ireland)