European stock indexes opened on higher on Friday, buoyed by progress in U.S.-China trade talks, while the U.S. dollar slipped to its lowest in more than three years.

European shares rose in early trading, after Asian shares hit their highest in more than three years in early trading, tracking the Wall Street rally.

Wall Street and TSX futures showed some gains.

Reasons for the upbeat mood included news that China has eased restrictions on rare earth minerals to the U.S. Also, U.S. Treasury Secretary Scott Bessent announced Thursday that he had asked Republicans to pull what has been called the “revenge tax” from President Donald Trump’s signature tax bill, after an agreement among G7 countries.

Khoon Goh, head of Asia research at ANZ, said that provision had made “some investors, especially foreign investors, nervous.”

“So if that provision gets removed, then that allays one of the concerns from foreign investors,” Goh said.

“The cumulation of these various ... positive developments all helped to contribute to the buoyant market mood we’re seeing.”

Vasileios Gkionakis, senior economist and strategist at Aviva Investors called it “potentially some optimism about some trade deals.”

“We have quite come from quite low levels in the aftermath of the Liberation Day in April. To a certain extent we have also had some mini-selloff on the back of the events in the Middle East, and in that sense we’re rebounding.

“I think it’s very early days, but I think there is a sense in the market that we are getting a bit fatigued with the theme of trade, and trade wars and trade deals, and would like to move past that,” he said.

Trump has set July 9 as the deadline for the European Union and other countries to reach a deal to reduce tariffs.

Overseas, the pan-European STOXX 600 was up 0.8 per cent. Britain’s FTSE 100 was up 0.44 per cent and France’s CAC 40 was up 1.21 per cent while Germany’s DAX was up 0.66 per cent.

In Asia, Japan’s Nikkei jumped 1.43 per cent higher and surpassed the 40,000 mark for the first time in five months, while Hong Kong’s Hang Seng was down 0.17 per cent.

Oil prices rose on Friday but were set for their steepest weekly decline since March 2023, as the absence of significant supply disruption from the Iran-Israel conflict saw any risk premium evaporate.

Brent crude futures rose 54 cents, or 0.8 per cent, to US$68.26 a barrel by 0830 GMT while U.S. West Texas Intermediate crude gained 60 cents, or nearly 0.9 per cent, to $65.83.

“The market has almost entirely shrugged off the geopolitical risk premiums from almost a week ago as we return to a fundamentals-driven market,” said Rystad analyst Janiv Shah.

In other commodities, spot gold lost 1.3 per cent to $3,283.56 per ounce by 0839 GMT, its lowest since late May.

The Canadian dollar was a little weak against its U.S. counterpart.

The day range on the loonie was 73.18 US cents to 73.38 US cents in early trading.

The U.S. dollar index, which measures the U.S. currency against six rivals, rose 0.16 per cent to 97.30.

The euro gained 0.01 per cent to US$1.1705. The British pound dropped 0.03 per cent to US$1.3724.

In bonds, the yield on the U.S. 10-year note was at 4.275 per cent ahead of the North American opening bell.

China industrial profits and current account surplus.

Japan jobless rate and retail sales.

Euro zone consumer and economic confidence.

Germany retail sales.

(8:30 a.m. ET) Canada’s monthly GDP for April. Consensus is a flat reading month-over-month.

(8:30 a.m. ET) U.S. personal spending and income for May. The Street expects month-over-month gains of 0.2 per cent and 0.3 per cent, respectively.

(8:30 a.m. ET) U.S. core PCE price index for May. Consensus is a rise of 0.1 per cent from April and up 2.6 per cent year-over-year.

(10 a.m. ET) U.S. University of Michigan Consumer Sentiment Index for June.