European stock futures mixed; subdued trading ahead of PMIs, retail sales By


© Reuters.

By Peter Nurse – European stock markets are expected to open in a tepid fashion Monday, as investors digest more Chinese cities relaxing mobility restrictions as well as the release of more important regional economic data.

At 02:00 ET (07:00 GMT), the contract in Germany traded 0.1% lower, in France dropped 0.1%, while the contract in the U.K. rose 0.1%.

European equities are set to start the week in a subdued fashion, with investors set to focus on the release of the final November data for the region, which are set to show the Eurozone heading into a recession as the year comes to an end.

Eurozone for October are also due for release, and are expected to fall 1.7% on the month with discretionary spending severely hit by soaring inflation.

Despite these signs of European economies in strife, the European Central Bank is still expected to hike at its final policy meeting of the year on Dec. 15 with inflation running well above its 2% target.

President is to make two appearances this week before the start of the ECB’s blackout period, and investors will be looking to see if she hints at a 50-basis point rate increase, after data last week showed that eased more than expected in November.

This caution means the European markets are unlikely to follow the positive trend seen in Asia after a number of Chinese cities joined the important economic hubs Shanghai and Beijing in relaxing some mobility and testing measures.

This raised hopes for a nationwide reversal of the country’s strict ‘zero-COVID’ stance, which has contributed to the slowing of China’s economic recovery.

“The timing of a major COVID policy change may be a bit earlier than our baseline expectation of after March 2023,” analysts at UBS said in a note on Monday.

In the corporate sector, Credit Suisse (SIX:) is likely to be in the spotlight Monday after the Wall Street Journal reported that Saudi Crown Prince Mohammed bin Salman is considering an investment of around $500 million to back the embattled Swiss lender’s investment bank.

Crude oil prices firmed Monday on optimism of a broad relaxation of China’s COVID restrictions while OPEC+ maintained its output targets over the weekend.

The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, decided to stick to the October plan to cut output by 2 million barrels per day from November, waiting to see the impact of the EU import ban and Group of Seven $60-a-barrel price cap on seaborne Russian oil, which came into force Monday.

By 02:00 ET, futures traded 0.7% higher at $80.50 a barrel, while the contract rose 0.6% to $86.06. 

Additionally, rose 0.3% to $1,815.05/oz, while traded 0.3% higher at 1.0564.

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