. European Stock Futures Mixed; U.K. GDP, Earnings in Focus

European Stock Futures Mixed; U.K. GDP, Earnings in Focus

11 Nov 2021

European stock markets are expected to open mixed Thursday, as investors digest the sharp rise in U.S. inflation and U.K. growth data on a busy day for European corporate earnings.

At 2:15 AM ET (0705 GMT), the DAX futures contract in Germany traded 0.2% higher, CAC 40 futures in France dropped 0.3% while the FTSE 100 futures contract in the U.K. rose 0.1%.

U.S. consumer price index surged 6.2% on an annual basis last month, according to data released on Wednesday, climbing at the fastest pace since 1990, boosting the case for faster Federal Reserve policy tightening.

The major indices on Wall Street closed lower Wednesday as the thought of the U.S. central bank potentially tightening monetary policy weighed, particularly on the high-profile tech sector.

However, the tone is more circumspect in Europe as the region’s central bank is seen as being way behind the Fed in terms of reining in its accommodative monetary policy stance. Only last week President Christine Lagarde stated that the European Central Bank is very unlikely to raise interest rates next year as inflation remains too low.

Additionally, economic growth suffered a setback in the third quarter in Europe, with U.K. GDP climbing just 1.3% on the quarter, a sharp slowdown from the 5.5% rate in the previous quarter. The annual growth rate slowed to 6.6% from the 23.6% level seen in the second quarter.

The onslaught of European corporate earnings continued Thursday, with Siemens (DE:SIEGn) reporting better-than-expected sales and orders during its fourth quarter, the German engineering giant overcoming ongoing supply chain bottlenecks.

RWE (DE:RWEG), Germany’s largest power producer, posted a 6% rise in nine-month core profit, and Zurich Insurance (SIX:ZURN) expressed confidence in hitting its 2022 targets while reporting property and casualty premiums rose 11% on a like-for-like basis in the first nine months. U.K. insurance group Aviva (LON:AV) also reported solid growth across all its businesses.

Crude prices edged higher Thursday, rebounding after the previous session’s losses on concerns the sharp rise in U.S. inflation, boosted by high energy costs, will prompt the Biden administration to release more strategic stockpiles.

Inventories of gasoline and distillates continued to fall, the U.S. Energy Information Administration said on Wednesday, while crude stockpiles rose just over 1 million barrels, after the government released 3.1 million barrels from the Strategic Petroleum Reserve.

President Joe Biden said he asked the National Economic Council to work to reduce energy costs, which may result in further SPR releases.

The FTSE MIB climbed up by 0.44% to 27,561.20. In the cash markets, the DAX  Germany was trading  up by 0.17%  to 16,067.65. CAC 40  in France  rose by 0.03% to 7,045.37 while the FTSE 100  in the U.K. was  up by 0.91% to 7,340.35. ,at the time of writing.