Europe stocks steady; Italy in spotlight after report Trump offers to buy debt

European stocks edged up Friday, on track to break a three-week run of losses, with some Italian banks rising after a report that President Donald Trump told the government he could buy some of the country’s debt.

The main spotlight for Friday will fall on the U.S., where Federal Reserve Chairman Jerome Powell is due to make a speech at the Jackson Hole, Wyo., gathering of central bankers.

How are the major benchmarks trading?

The Stoxx Europe 600 Index SXXP, +0.22% was flat at 383.73. With one session to go, the pan-European index is up about 0.7%, putting it on track to snap a three-week string of declines. U.S. stock futures were also moving up modestly.

Germany’s DAX DAX, +0.21%  gave up an earlier gain to trade flat at 12,366.97 and setting up for a gain of 1.3% for the week. Italy’s FTSEMIB Italy Index I945, +0.49%  up 0.4% to 20,681.57, while the CAC 40 Index PX1, +0.43%  was up 0.2% to 5,427.88. Those national indexes were also set to break with a three-week run of losses.

The euro EURUSD, +0.2772%  was higher against the dollar, trading at $1.1561, compared with $1.1544 late Thursday.

What’s moving the market?

In Italy, shares of Fiat Chrysler Automotive NV FCA, +2.98%  rose 2% and several banks were higher, among them UniCredit SpA UCG, +0.58%  up 1.1% and Unione di Banche Italiane UBI, +0.92%  up 1%. Traders were eyeing a report in Italian daily Corriere della Sera that President Donald Trump offered to help the country out by buying some of its debt, in a meeting with the Italian Prime Minister Guiseppe Conte three weeks ago. It’s unclear whether there was any substance to the offer.

Italy, the third-largest economy in the eurozone, has become Europe’s latest worry, amid fears that its populist government may expand fiscal deficits more than expected through next year’s budget. That would pit the country against the fiscally conservative European Union.

In Germany, the Federal Statistical Office said Germany’s gross domestic product grew at a quarterly clip of 0.5% or an annualized rate of 1.8% in the second quarter. But economists voiced caution that global trade tensions and political risks could cloud the growth outlook.

European stocks may also take their cue from Wall Street, with Fed Chairman Powell expected to come under scrutiny at Jackson Hole for his comments on U.S. interest rates and the economy. Fed minutes earlier this week indicated that a September interest-rate hike remains likely, despite criticism from President Donald Trump.

What stocks are in focus?

Shares of Swedish Match AB SWMA, -4.35%  fell 3.7% leading the decliners in the Stoxx Europe 600. Analysts at Jefferies initiated coverage on the smokeless tobacco maker with a downbeat view on growth for the company.

Leading the gainers, Kingspain Group PLC KRX, +8.54%  shot up more than 8% after the Ireland-based building-materials company reported higher first-half profit.

Shire PLC SHP, +2.24% SHPG, -0.82%  was another leading gainer, up 2.6% after the Food and Drug Administration approved a treatment by the pharmaceutical maker for a rare genetic disease that can cause life-threatening swelling.

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