European Stock Futures Higher; U.K. Retail Sales Slump

© Reuters

By Peter Nurse

AiVIF.com - European stock markets are expected to open higher Friday, boosted by the previous session’s late rally on Wall Street, but sentiment remains fragile as economic data points to a global slowdown.

At 02:05 AM ET (0605 GMT), the DAX futures contract in Germany traded 0.6% higher, CAC 40 futures in France climbed 1.1% and the FTSE 100 futures contract in the U.K. rose 0.7%.

European equity indices have received a positive handover from the U.S., as the major averages on Wall Street received late buying interest to close with solid gains on Thursday, as Federal Reserve Chair Jerome Powell wrapped up his two-day testimony on the economy in Congress.

However, sentiment remains very brittle on concerns that aggressive monetary tightening by a number of central banks, and the Federal Reserve, in particular, will push the global economy into recession, the possibility of which Powell acknowledged.

Data released Friday showed U.K. retail sales fell 0.5% on the month in May, falling 4.7% on the year, as consumers struggled with soaring prices, cutting discretionary spending given the need to buy essentials like food and petrol.

Earlier in the day U.K. consumer confidence dropped to a record low, with market research firm GfK saying its measure of sentiment dropped 1 point to minus 41 in June, the lowest reading in the 48 years of the survey.

U.K. Prime Minister Boris Johnson received the backlash of that falling confidence, with his Conservative Party losing two by-elections, including a key seat in southeast England.

In corporate news, Sanofi SA (EPA:SASY) is likely to be in the spotlight after the French drugmaker said its COVID-19 vaccine candidate delivered 72% efficacy in adults against the Omicron strain, citing data gathered in a study.

Oil prices stabilized Friday, with traders having to balance concerns of falling demand on the back of slowing economic growth, particularly in the U.S., the largest consumer of crude in the world, with supply uncertainty.

The crude market has also been deprived this week of fresh official data on the state of U.S. inventories, as the Energy Information Administration’s report was delayed until at least next week due to hardware issues.

The American Petroleum Institute, an industry body, reported on Wednesday a build of 5.6 million barrels for the week ended June 17.

By 02:05 AM ET, U.S. crude futures traded 0.4% higher at $104.73 a barrel, while the Brent contract rose 0.2% to $110.29. The benchmarks are on course for their first back-to-back weekly losses since early April.

Additionally, gold futures rose 0.2% to $1,825.45/oz, while EUR/USD traded 0.2% higher at 1.0544.