U.S. equity futures fell in early Friday trade as indications that leaders will return early to Washington from their holidays were not enough to restore confidence that a deal can be reached to avoid the fiscal cliff. Now, it appears likely that a deal will be reached to push the tough decisions into 2013, as was always the more likely case.

In other news, the final reading of third quarter French GDP was reported at 0.1% in the quarter, below the prior reading and estimates of 0.2% growth.

Japanese Finance Minister Aso spoke overnight, stating that the government would intervene in currency markets when gains or losses in the yen become excessive. In short, the government wants a weaker yen but they want it in an orderly fashion, for a sharp weakening would drive inflation to uncontrollable levels and could spark hyperinflation.

The People's Bank of China released a statement overnight saying that current inflation levels are are stable and that the PBOC will use various policy tools to drive credit growth.

• S&P 500 futures fell 2.5 points to 1,408.25.
• The EUR/USD was lower at 1.3172 and has now failed to break 1.33 on a few occasions over the past few weeks.
• Spanish 10-year government bond yields rose to 5.302%.
• Italian 10-year government bond yields fell to 4.524%.
• Gold was lower by 0.23% at $1,660.10 per ounce.

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Asian markets
Asian shares were mostly higher overnight despite fiscal cliff fears and signs that Japanese intervention may be more muted than previous signals indicated. The Japanese Nikkei Index rose 0.7% while Chinese shares jumped 1.24% in Shanghai on the positive PBOC comments and the Hang Seng Index rose 0.21%. In addition, the Korean Kospi rose 0.49% as the central bank intervened to weaken the currency and Australian shares rose 0.5%.

European markets
European shares were mostly lower in early trade as fiscal cliff fears dominated and weak French GDP shows that the eurozone crisis continues to consume the continent. The Spanish Ibex Index fell 1.25% following large losses Thursday in financials and the Italian MIB Index fell 0.37%; Bankia shares fell a whopping 28% in early trade as the company was named as having a large negative equity in a report from the Spanish bailout fund Thursday. Meanwhile, the German DAX fell 0.31% and the French CAC fell 0.81% and U.K. shares dropped 0.09%.

Commodities
Commodities were mostly lower overnight following the weak French GDP data and concerns over slowing inflation in China. WTI crude futures fell 0.07% to $90.81 per barrel and Brent crude futures fell 0.25% to $110.51 per barrel. Copper futures rose slightly by 0.07% to $360.35 per pound as Chinese and Australian shares rallied. Gold was lower and silver futures fell 0.51% to $30.09 per ounce.

Currencies
Currency markets seem to be in reversal mode Friday, as pairs that had gained over the course of the weak gave back some of those gains. The EUR/USD was lower at 1.3172 and the dollar rose against the yen slightly to 86.19 but was well off of the highs near 86.50. Overall, the Dollar Index rose 0.35% on strength against the euro, the Swiss franc, and the Swedish krone.

Premarket movers
Stocks moving in the premarket included:

• General Electric (GE) rose 2.51% premarket on a positive note on Seeking Alpha.
• Nokia (NOK) shares fell 2.5% as the company reached a deal with Blackberry maker Research In Motion (RIMM) to license some patents.
• U.S. Steel (X) shares fell 0.47% premarket as the steel glut continues to keep prices low.

Earnings
No notable companies are expected to report earnings Friday.

Economics
On the economics calendar Friday, the Chicago PMI and pending home sales are due out as well as the EIA Natural Gas and Petroleum Status reports. Also, Brazil is set to issue its official debt-to-GDP ratio at 8:00 a.m. ET.

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