European Stock Futures Lower; Ukraine Situation Remains Tense

European Stock Futures

European stock markets are expected to open lower Thursday, as investors fret over the fraught situation on the Ukraine border while digesting the minutes of the last Federal Reserve meeting.

At 2 AM ET (0700 GMT), the DAX futures contract in Germany traded 0.5% lower, CAC 40 futures in France dropped 0.3% and the FTSE 100 futures contract in the U.K. fell 0.2%.

Global stock markets had received a boost earlier this week after Russia claimed it was withdrawing some troops from the Ukraine border, lessening the chances of an invasion.

However, doubts about those claims have subsequently emerged, with a number of Western countries, including the U.S., as well as NATO warning that Russia’s military presence on Ukraine’s borders was growing, rather than shrinking.

Tensions were raised even higher Thursday after Russian-backed rebels in eastern Ukraine accused government forces of shelling their territory with mortars. This is the type of event that could be used by Moscow to justify an invasion.

Providing a degree of support were the minutes from the last Fed meeting, which indicated that while the central bank intends to shortly begin raising interest rates to fight inflation, its decisions would be data-dependent and would be made on a meeting-by-meeting basis.

With consumer inflation running at levels not seen for 40 years, there had been fears within the market that the minutes would suggest a widespread desire among the policymakers for a much more aggressive policy tightening stance, potentially including a 50 basis-point hike next month.

Back in Europe, the earnings season continues Thursday, with Airbus  in the spotlight after Europe’s largest aerospace group posted a record net profit for 2021 and restarted its dividend for the first time in two years, helped by a partial recovery in jet deliveries and a reversal of some Covid-19 charges.

Standard Chartered raised its core profitability goals and promised a share buyback as the U.K. bank’s full-year profit doubled, while Germany’s Commerzbank  posted a better-than-expected fourth-quarter and 2021 net profit despite undergoing a major overhaul.

Swiss food group Nestle  said it expects sales to slow this year after posting a strong 7.2% rise in the fourth quarter, while Orange , France’s biggest telecoms operator, reported a drop in fourth-quarter core operating profit.

Oil prices weakened Thursday following comments by France suggesting an agreement to salvage Iran’s 2015 nuclear deal with world powers was within reach, potentially releasing the Persian Gulf country’s crude output onto the global market.

The FTSE MIB climbed down  by 0.02% to 26,980.20. In the cash markets, the DAX  Germany was trading  up by 0.44%  to 15,429.65. CAC 40  in France  rose by 0.65% to 7,009.37 while the FTSE 100  in the U.K. was  down by 0.13% to 7,595.35 ,at the time of writing.

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