Worries of a U.S. regional banking crisis persisted, worrying markets further, after PacWest Bancorp said it planned to explore strategic options. Oil prices were also hurt by a strengthening dollar after the European Central Bank raised rates on Thursday and signaled the need for more tightening a day after the U.S. Federal Reserve also raised rates. A stronger greenback makes crude more expensive for buyers holding foreign currency.
However, investors now broadly expect the Fed to pause rate hikes at its June meeting, after the U.S. central bank dropped language that it "anticipates" further rate increases from its policy statement.
In China, factory activity unexpectedly contracted in April
as orders fell and poor domestic demand dragged on the sprawling
manufacturing sector, imperiling the broader economic outlook
for the second quarter.
Traders are now focused on the release of U.S. employment
data for April later in the day, hoping it could help gauge the
health of the economy, as well as comments on monetary policy
from St. Louis Fed President James Bullard and Minneapolis Fed
President Neel Kashkari at the Economic Club of Minnesota.
(Reporting by Arathy Somasekhar; Editing by Leslie Adler)
