Much lower European equity futures; US inflation will guide Fed thinking


By Peter Nurse – European stock markets are set to open modestly on Thursday as investors are wary of the release of key inflation data from the United States as well as continued turmoil in the UK market.

At 02:00 ET (06:00 GMT), Germany’s DAX futures traded down 0.3%, France’s CAC 40 futures fell 0.1%, while FTSE futures 100 in the UK rose 0.1%.

European stocks are expected to follow their Asian counterparts lower as investors fear a potential shock from US Inflation Data after minutes from last month’s Federal Reserve policy meeting showed policymakers seemed more worried about doing too little than too much on inflation.

U.S. inflation data due out later in the session could help the U.S. central bank decide the size of its next rate move in November, which markets expect to be another 0 hike. .75 percentage points.

Data released by Germany earlier on Thursday showed that consumer inflation in the dominant eurozone economy rose 10.0% year on year in September, up 1.9% on the month, increasing pressure on the European Central Bank continue to tighten monetary policy.

Elsewhere, the bank of england announced its intention to end its emergency bond buying program on Friday. However, with new UK Prime Minister Liz Truss “absolutely” committed to her spending plans and gilt yields at their highest levels in two decades, the Bank may be forced to back down.

In corporate news, there may well be a European cross-reading of news that the Taiwanese chipmaker TSMC on Thursday posted an 80% increase in net profit in the third quarter, its strongest quarterly growth in net profit in two years.

Oil prices stabilized around weekly lows on Thursday as traders digested a sharp rise in U.S. crude inventories amid fears of weakening global demand.

The data of the American Petroleum Institute, released on Wednesday, showed U.S. crude inventories rose by 7 million barrels last week, raising fears of sluggish demand in the world’s biggest consumer. A official government reading is expected later in the session.

The Organization of the Petroleum Exporting Countries cut its oil demand forecast for 2022 and 2023 on Wednesday, just a week after the group and its allies agreed to cut oil supplies.

As of 2 a.m. ET, U.S. crude futures were trading down 0.2% at $87.12 a barrel, while the Brent contract was largely trading at $92.47. Both contracts are down almost 6% this week.

Additionally, gold futures fell 0.1% to $1,676.10 an ounce, while EUR/USD traded down 0.1% to 0.9700.

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