European Stock Futures Mixed; Inflation Data Looms Large

© Reuters.

By Peter Nurse

AiVIF.com -- European stock markets are expected to open in a subdued fashion Monday, with investors looking for direction following the European Central Bank’s policy decision and ahead of key inflation data.

At 2:05 AM ET (0605 GMT), the DAX futures contract in Germany traded 0.3% higher, the FTSE 100 futures contract in the U.K. rose 0.2%, but CAC 40 futures in France dropped 0.2%.

The ECB decided last week to slow down its emergency bond purchases in the fourth quarter, citing higher inflation and stronger gross domestic growth within the region.

ECB President Christine Lagarde was eager to stress that the move wasn’t the start of tapering, but investors will focus on comments from the Chief Economist Philip Lane, in particular, this week for more insights into the thinking at the central bank.

The timing of when central banks choose to scale back economic stimulus is a key driver of market sentiment, and with this in mind the latest inflation releases from the U.K. and the U.S. on Tuesday will be studied carefully.

Ahead of that, the handover from Asia was generally negative Monday, with Chinese electric vehicle stocks hit hard after the country’s industry minister said consolidation in the sector was needed.

Additionally, Chinese property developer Soho China slumped after a takeover deal by Blackstone Group (NYSE:BX) fell through, while the Financial Times reported Beijing is considering breaking up Alipay, the payments app owned by Ant Group.    

Crude prices advanced Monday, posting a one-week high, with supply from the important U.S. Gulf of Mexico region still impacted by the damage from Hurricane Ida more than two weeks after the event.

The Organization of Petroleum Exporting Countries is expected later Monday to release its latest monthly assessment of worldwide conditions, with the global growth of Covid-19 cases likely to weigh on their future demand prediction.

By 2:05 AM ET, U.S. crude futures traded 0.9% higher at $70.31 a barrel, while the Brent contract rose 0.8% to $73.52. Both contracts reached their highest level since Sept. 3 earlier in the session.

Additionally, gold futures rose 0.1% to $1,793.75/oz, while EUR/USD traded 0.2% lower at 1.1794.