European stock markets are expected to open marginally lower Thursday as investors digest the region’s growing inflationary pressures as well as Thyssenkrupp’s quarterly report.
At 2:05 AM ET (0705 GMT), the DAX futures contract in Germany traded flat, CAC 40 futures in France dropped 0.1% and the FTSE 100 futures contract in the U.K. fell 0.1%.
The major equity indices in Europe have pushed close to record levels, boosted by strong corporate earnings, but concerns are growing about the region’s inflationary outlook and the impact this could have on monetary policy.
Eurozone inflation surged 4.1% year-on-year in October, data revealed Wednesday, more than twice the European Central Bank’s target. At the same time, the equivalent U.K. number came in at 4.2%, its highest in almost a decade.
The ECB has repeatedly said that these price pressures should ease next year, but is coming under increased pressure to abandon its ultra easy monetary policy and tackle price growth.
Its own Financial Stability Review warned on Wednesday that increasingly stretched prices in property and financial markets, risk-taking by non-banks and elevated borrowing pose a threat to the region’s stability.
Over in the U.K., the Bank of England is widely expected to become the first of the major central banks to raise interest rates in the wake of the pandemic, probably in December.
Meanwhile, the quarterly corporate earnings season continues, with Thyssenkrupp (DE:TKAG) predicting its operating profit could more than double next year as its recovery continues. The German engineering and steel group also indicated it is considering listing its hydrogen unit in an initial public offering.
Earnings from the likes of the Royal Mail (LON:RMG) and National Grid (LON:NG) will also be studied, while Holcim (SIX:HOLN), the world’s largest cement maker, has unveiled its 2025 strategy, which included plans to expand its solutions and products business and lower its carbon footprint.
The FTSE MIB climbed up by 0.01% to 27,829.20. In the cash markets, the DAX Germany was trading up by 0.15% to 16,278.65. CAC 40 in France rose by 0.08% to 7,161.37 while the FTSE 100 in the U.K. was down by 0.34% to 7,267.35. ,at the time of writing.
