European Stock Futures Edge Higher; BNP Paribas Results in Focus

FTSE 100 futures

European stock markets are expected to open marginally higher Tuesday, trading in a muted fashion as global investors await the release of key U.S. inflation data later in the week.

At 2:05 AM ET (0705 GMT), the DAX futures contract in Germany traded 0.1% higher, CAC 40 futures in France climbed 0.1% and the FTSE 100 futures contract in the U.K. rose 0.2%.

The major focus of investors these days is the speed that central banks look to withdraw the emergency support put in place two years ago after the Covid-19 pandemic sent the global economy into a deep but short recession.

The Bank of England increased interest rates last week, delivering back-to-back hikes for the first time since 2004, and the European Central Bank hinted at action later in the year. But it’s the U.S. Federal Reserve that most investors look most closely at, given the importance of the U.S. economy in driving global growth.

Fed policymakers have guided towards the U.S. central bank raising interest rates in March, and Friday’s strong jobs report pointed to the likelihood of an aggressive 50 basis points move. Thursday’s consumer prices release could cement such an idea, with the headline CPI seen rising 0.5% on the month and 7.3% on the year in January.

Back in Europe, the economic data slate Tuesday includes French trade data, Spanish industrial production and Italian retail sales, all for the month of December.

In the corporate sector, the semiconductor sector will be in focus after Softbank (T:9984) announced Tuesday its $66 billion deal to sell British chip designer Arm to Nvidia (NASDAQ:NVDA) had fallen through amid regulatory hurdles. The Japanese conglomerate added that it will now look to take Arm public within the fiscal year ending March 31, 2023.

Elsewhere, BNP Paribas (OTC:BNPQY) will also be in the spotlight after the French bank reported a healthy rise in fourth-quarter net profit, driven by strength in its domestic markets.

Oil prices stabilized Tuesday, after closing lower for the first time in seven sessions as the market focused on the resumption of nuclear talks between the West and Iran later in the session, which could lead to the removal of sanctions on Iranian oil sales.

While such an outcome could potentially increase global supply, talks have dragged on for more than a year since President Joe Biden took office and getting both sides to sign an agreement will prove difficult.

Investors will also look for U.S. crude oil supply data from the American Petroleum Institute, due later in the day.

The FTSE MIB climbed down by 1.02% to 26,328 .20. In the cash markets, the DAX  Germany was trading  up by 0.71%  to 15,206.65. CAC 40  in France  rose by 0.85% to 7,009.37 while the FTSE 100  in the U.K. was  up by 0.76% to 7,573.35 ,at the time of writing.

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