In notes dated July 24, Goldman said it no longer expects the ECB to deliver a rate cut this year, while J.P. Morgan has pushed its rate-cut forecast to October from September previously. On Thursday, the ECB held policy rates unchanged at 2% after having cut interest rates eight times since June 2024.

European shares closed lower on Friday, as investors assessed mixed corporate earnings while awaiting updates on a framework of an EU-U.S. trade deal that officials said could be reached as early as this weekend.

FTSE 100 snaps six-day winning streak amid a global equity sell-off, while the pound slides, with the euro at its strongest since April. June retail sales rebounded thanks to warm whether, but not as much as economists had expected.

Regional shares ended the Thursday session higher, as investors focused on U.S.-EU trade talks, the European Central Bank's widely anticipated interest rate hold and a flurry of corporate earnings.

The euro zone economy has remained resilient to the pervasive uncertainty caused by a global trade war, a slew of data showed on Friday, even as European Central Bank policymakers appeared to temper market bets on no more rate cuts.

European bond yields rose as the European Union and the U.S. converge on a potential trade deal that would result in lower-than-feared tariffs on the bloc's exports. Germany's benchmark 10-year yield

The European Central Bank, based in Frankfurt, has telegraphed its intention to lower its key interest rate to 3.75 percent from 4 percent.

The Portuguese government nominated on Thursday Alvaro Santos Pereira, the chief economist at the Organisation for Economic Cooperation and Development, as the next central bank governor to succeed Mario Centeno,