By Geoffrey Smith — European stock markets opened slightly lower on Friday but were still on course for a weekly gain as participants awaited the outcome of key talks between U.S. President Joe Biden and his Chinese counterpart Xi Jinping .

As of 4:20 a.m. ET (0820 GMT), the decline was 6 points, or 0.2%, while the broader base was flat. The best performing major index was the in Italy, although it underperformed with a drop of 0.4%, a day after President Emmanuel Macron warned that the state may have to nationalize “certain companies energy” – a comment taken to refer to Electricité de France (PA: ).

Equities should end the week higher; thanks to the ongoing diplomacy that has accompanied Russia’s war in Ukraine, which has seen the two sides’ positions come closer together since last weekend. However, on the ground, the campaign remains more destructive than ever, with Russian rockets hitting the city of Lviv in western Ukraine overnight.

An essential part of this diplomatic process – despite its location on the other side of the world – is China, whose political support for Russia has cushioned the impact of Western economic sanctions on the country. Secretary of State Antony Blinken warned Thursday that “China will take responsibility for any action it takes to support Russia’s aggression and we will not hesitate to impose costs.”

Foreign exchange markets remained broadly stable, although the dollar fell to a six-year high against the yen after the Bank of Japan warned of the negative effects on the Japanese economy of the war in Ukraine, in largely through rising raw material costs. This follows similar warnings from the European Central Bank and the Bank of England this week. The BoE raised its key rate for a third consecutive meeting to 0.75% on Thursday, but the pound weakened as the Bank’s warning about the effects of war put more emphasis on the downside risk for growth than on the upside risk to prices. As such, traders have reduced their bets on the BoE, keeping pace with the Fed as it tightens policy through 2022.

As of 4:20 a.m. ET, the was down 0.1% at $1.1077 while the was up 0.1% at $1.3153. The also traded at 118.90 yen, up 0.3% on the day.

A busy week for central banks ends later with the policy meeting of the Central Bank of Russia. The pressure on the has eased in recent days, but it has still lost a third of its value since the invasion. President Vladimir Putin offered a new term for Governor Elvira Nabiullina on Thursday, days after rumors swirled that she unsuccessfully offered to resign.

Among early movers, Danish shipping giant Maersk (CSE:) rose 0.4% after warning that China’s series of COVID-19 outbreaks could reignite disruptions to global supply chains, while that the listed Dutch company Prosus (AS:), which owns Naspers’ strategic stake in Chinese internet giant Tencent, rose 2.3% as sentiment towards Chinese stocks continued to gradually improve.

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