European Stock Futures Higher; Corporate Earnings in Focus

DAX futures

European stock markets are expected to open higher Wednesday on a busy day for corporate earnings, but investors will be keeping a wary eye on the tense situation in Ukraine ahead of the release of key U.S. inflation data later in the week.

At 2 AM ET (0700 GMT), the DAX futures contract in Germany traded 0.1% higher, CAC 40 futures in France climbed 0.5% and the FTSE 100 futures contract in the U.K. rose 0.6%.

Global investors are focusing closely on inflation data as central banks look to contain surging consumer prices by withdrawing the emergency support put in place in the wake of the Covid-19 pandemic.

Thursday’s U.S. consumer prices release is firmly in the spotlight, with the headline CPI seen rising 0.5% on the month and 7.3% on the year in January, probably cementing the likelihood of the Federal Reserve raising interest rates in March.

Ahead of that, the corporate sector will be in focus Wednesday, on a busy day for quarterly earnings.

Norwegian oil company Equinor (OL: EQNR) posted record pretax profits for the fourth quarter and said it will raise its dividend and increase share buybacks, driven by the boom in oil and gas prices.

French funds manager Amundi (PA: AMUN) posted a strong rise in earnings helped by its retail business and expansion in Asia, while Dutch paints maker Akzo Nobel (OTC: AKZOY) posted weaker-than-expected quarterly earnings, weighed by high costs of raw materials.

Numbers are also expected by the likes of L’Oreal (PA: OREP), Deutsche Boerse (DE: DB1Gn), Siemens Energy (DE: ENR1n), ABN Amro (AS: ABNd), Barratt Developments (LON: BDEV), and GlaxoSmithKline (LON: GSK).

Elsewhere, the fraught situation on the Ukraine border continues to command attention amid worries an invasion by Russia could inflict economic damage on the entire region.

The European Central Bank is preparing banks for a possible Russian-sponsored cyberattack, Reuters reported Wednesday, while Austria’s Raiffeisen Bank International last week announced it has set aside risk provisions for possible sanctions on Russia.

Oil prices edged lower Wednesday despite industry data showing an unexpected drop in U.S. crude stocks, implying healthy demand at the world’s largest consumer.

Data from the American Petroleum Institute showed a drop of 2 million barrels in crude inventories last week, against analyst expectations of a 400,000-barrel increase.

Official numbers from the U.S. Energy Information Administration will be released later in the session.

Concerns about a possible Iran nuclear deal that could lift U.S. sanctions on Iranian oil and quickly add supplies to the market have resulted in the market dropping over the last two sessions.

By 2 AM ET, U.S. crude futures traded 0.1% lower at $89.24 a barrel, while the Brent contract fell 0.1% to $90.65.   

Additionally, gold futures rose 0.1% to $1,828.70/oz, while EUR/USD traded 0.1% higher at 1.1420.

The FTSE MIB climbed up by 0.32% to 26,411 .20. In the cash markets, the DAX  Germany was trading up by 0.24%  to 15,242.65. CAC 40  in France rose by 0.27% to 7,029.37 while the FTSE 100  in the U.K. was down by 0.08% to 7,567.35, at the time of writing.

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