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European Stock Futures Higher; German Retail Sales Slump

Stock MarketsSep 01, 2021 07:32
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By Peter Nurse - European stock markets are expected to open higher Wednesday, helped by upbeat comments from the ECB, but concerns remain about the strength of the global economic recovery.

At 2:05 AM ET (0605 GMT), the DAX futures contract in Germany traded 0.3% higher, CAC 40 futures in France climbed 0.6% and the FTSE 100 futures contract in the U.K. rose 0.6%.

Helping the tone Wednesday were comments by ECB Vice President Luis de Guindos, stating in a Spanish newspaper that the Eurozone economy is growing quicker than the European Central Bank expected.

"The economy is performing better in 2021 than we expected, and this will be reflected in the projections that will be published in the coming days," El Confidencial quoted de Guindos as saying on Wednesday.

However, this could also result in the sooner than expected withdrawal of the central bank’s stimulus, especially after Tuesday’s Eurozone inflation data showed consumer prices increased by 3% in August, far above expectations and the European Central Bank’s 2% target. The accounts of the last ECB policy-meeting also acknowledged the risk of excessive inflation for the first time in years.

Data released earlier Wednesday showed China’s factory activity entered contraction territory for the first time in nearly one-and-a-half years in August. 

The Caixin manufacturing purchasing managers index, released earlier in the day, was at 49.2, below the 50-mark indicating growth, as lockdown measures to contain the latest Covid-19 outbreak, supply bottlenecks, anti-pollution initiatives and high raw material prices all contributed to a slowdown in the world’s second-largest economy. 

Back in Europe, German retail sales slumped 5.1% on the month in July, way below expectations, setting the scene for the release of the latest Eurozone unemployment figures for July and August manufacturing PMI data.

Crude prices rose Wednesday, supported by a larger-than-expected decline in weekly U.S. oil stocks and ahead of a meeting of the group of top producers to determine future production levels.

The Organisation of Petroleum Exporting Countries and their allies, a group known as OPEC+, is expected later Wednesday to confirm the addition of another 400,000 barrels per day of supply each month through December, judging that the market is strong enough to cope with the extra output. 

The American Petroleum Institute reported on Tuesday a draw of just over 4 million barrels in U.S. crude supply for last week, and investors will be looking to see if the U.S. Energy Information Administration confirms this sign of strength later in the session.

Additionally, U.S. refiners will continue to assess flood damage in the wake of Hurricane Ida.

By 2:05 AM ET, U.S. crude futures traded 0.9% higher at $69.11 a barrel, while the Brent contract rose 0.8% to $72.21.

Additionally, gold futures rose 0.1% to $1,819.35/oz, while EUR/USD traded 0.1% lower at 1.1799.


European Stock Futures Higher; German Retail Sales Slump

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