European Stock Futures Higher; Telecom Italia in Spotlight After Approach

European Stock Futures Higher; Telecom Italia in Spotlight After Approach

European stock markets

European stock markets are expected to open higher Monday, starting a new week on a positive tone despite the return of Covid-induced restrictions to the continent.  

At 2 AM ET (0700 GMT), the DAX futures contract in Germany traded 0.3% higher, CAC 40 futures in France climbed 0.4% and the FTSE 100 futures contract in the U.K. rose 0.4%.

The major equity indices in Europe have shown strength of late, boosted by strong corporate earnings and helped by the European Central Bank retaining a dovish monetary policy stance.

This strength could be tested Monday following the return of Covid-19 restrictions, with Austria starting its fourth national lockdown since the start of the pandemic.

The lockdown is meant to put a brake on infections before mandatory vaccinations kick in from February. That would be the first such policy in Europe, where governments have mostly kept inoculations voluntary.  

Neighboring Germany also refused to rule out a lockdown on Friday, while the likes of Ireland and the Netherlands have encouraged working from home in order to try and contain the spread of the virus.

Still, the reemergence of the virus is likely to add weight to European Central Bank President Christine Lagarde’s view that tightening policy now could choke off the region’s economic recovery.

The central bank has been under increasing pressure to tighten its ultra-loose monetary policy to offset rising price pressures, especially after Eurozone inflation surged 4.1% year-on-year in October, more than twice the ECB’s target.

Turning to the quarterly corporate earnings season, Swiss bank Julius Baer (SIX:BAER) reported that its profitability rose “significantly” in the first 10 months of 2021, boosted by buoyant markets and new money inflows.

The FTSE MIB climbed up by 1.17% to 27,337.20. In the cash markets, the DAX  Germany was trading  down by 0.38%  to 16,159.65. CAC 40  in France  fell by 0.42% to 7,112.37 while the FTSE 100  in the U.K. was  down by 0.45% to 7,223.35. ,at the time of writing.

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