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Not a Bad Third Quarter for the Stock Market

European stocks edged higher Friday, while Wall Street futures remained flat, as global investors round out an active quarter of trading dominated by geo-political risks and central bank policy signalling.

The Stoxx Europe 600 index, the broadest measure of share prices, was essentially unchanged from its Thursday close in the opening 90 minutes of trading but still looks set to gain 1.8% over the third quarter amid improving regional economic data and tepid political risks.

Early indications from U.S. futures prices are equally mixed, with Dow Mini futures pointing to a modest single-point gain at the opening bell and S&P Mini futures suggest a slightly larger slip at the start of trading for the broader measure of share prices after its record-high close last night.

Germany’s DAX is the European session’s standout, however, rising 30 points, or 0.23%, despite a sharp slide for index heavyweight Volkswagen AG (VLKAY) . The benchmark for bluechip stocks in Europe’s largest economy has risen more than 5% this quarter.

Shares in the world’s biggest carmaker fell 2.1% in Frankfurt after it said it would take a $3 billion hit on its third quarter earnings linked to its plans to buyback diesel engine cars from U.S. customers sold during its emissions scandal.

Britain’s FTSE 100 is also looking at a small 30 point gain, a move that will keep the benchmark in positive territory for the quarter, but only just barely, if it holds until the closing bell. 

FTSE 100-listed stocks, which earn the bulk of their revenues outside of the U.K., are getting a boost from a modestly weaker pound, which slipped against the U.S. dollar in early Friday trading as traders retreated from the currency’s solid quarterly gain despite renewed rate hike signals from the Bank of England.

Sterling was marked 0.24% lower against the greenback in the opening hours of London trading and changing hands at 1.3405 each by 09:00 local time. The pound has risen some 4% against the dollar over the past three months as investors re-price interest rate increases from the BoE, which has been concerned about above-target inflation thanks to the pound’s post Brexit vote slump.

Currency markets were otherwise largely unchanged overnight, with the dollar index consolidating its weekly gain of 1.1%, the best of the year, as investors reprice assets in the wake of the Federal Reserve’s signalling and potential stimulus in the form of corporate tax cuts.

Overnight in Asia, the region’s MSCI ex-Japan benchmark was marked 0.13% higher into the start of European trading while Japan’s Nikkei 225 gave back around 0.03% of its 1.48% quarterly gain, despite a host of improving economic metrics, to close at 20,356.28 points.

U.S. crude prices took a breather from their torrid September run, which has seen prices rise more than 9%, with West Texas Intermediate crude futures for November delivery marked little changed from their Thursday close at $51.57 per barrel by 09:30 London time.

Brent crude prices, which have gained 10% so far this month and came within about 40 cents of the $60 dollar mark, were seen 0.4% lower at $57.15.

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