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European Stock Futures Largely Unchanged; Fed Meeting, Credit Suisse in Focus

Stock MarketsJul 29, 2021 07:36
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By Peter Nurse - European stock markets are expected to open largely unchanged Thursday after the Federal Reserve concluded its latest policy-setting meeting and as the corporate earnings season continues.

At 2:05 AM ET (0605 GMT), the DAX futures contract in Germany traded flat, CAC 40 futures in France rose 0.1% and the FTSE 100 futures contract in the U.K. was flat.

Investors have been parsing through the Federal Reserve policy statement, released late Wednesday, with the U.S. central bank saying that "progress" had been made toward its economic goals, potentially bringing forward the time when it might start reining in its bond-buying program. That currently runs at $120 billion a month.

That said, Fed Chairman Jerome Powell made it clear, in his subsequent press conference, that the U.S. economy still had to make substantial progress on jobs before any form of tapering, a more dovish tone that the statement suggested.

“Powell hinted that the Fed has already reached one out of two targets and that full employment and inflation ‘moderately exceeding the 2% target’ are not prerequisites for a taper decision. Interesting months are upcoming,” said analysts at Nordea in a note to clients.

European markets have received a positive handover from Asia after reports that Chinese authorities tried to calm market fears about a regulatory clampdown by calling banks overnight. This could allow European investors to concentrate more fully on the ongoing reporting season.

Airbus (PA:AIR), the world’s largest commercial planemaker, sharply raised its forecasts for full-year deliveries and earnings after reporting better-than-expected half-year results. Royal Dutch Shell  (AS:RDSa) also beat estimates, while Volkswagen (DE:VOWG_p) raised its profit forecasts for the year and Anglo American PLC (LON:AAL) increased its stock buyback program by another $2 billion.

Credit Suisse (SIX:CSGN) is also likely to be in the spotlight Thursday after the Swiss banking giant revealed that an independent external investigation into the Archegos scandal showed that it had failed “to effectively manage risk” but it had not been involved in any “fraudulent or illegal conduct”. Still, it posted a 78% fall in second-quarter net profit, hit by a sharp drop in its investment banking revenues.

In economic news, German inflation and unemployment data for July are due later in the session, but eyes will also be on the release of the minutes of last week's European Central Bank meeting.

Elsewhere, oil prices rose Thursday, helped by U.S. crude supplies falling to their lowest level since January 2020, resuming their downward trend after last week’s surprise build.

Data from the U.S. Energy Information Administration, released late Wednesday, showed that crude inventories dropped by just over 4 million barrels during the week to July 23. 

These stocks rose for the first time in nine weeks the previous week, prompting concerns that demand was peaking in the world’s largest consumer. 

At 2:05 AM ET, U.S. crude futures traded 0.5% higher at $72.72 a barrel, while the Brent contract rose 0.4% to $74.17.

Additionally, gold futures rose 0.9% to $1,816.50/oz, while EUR/USD traded 0.1% higher at 1.1857.


European Stock Futures Largely Unchanged; Fed Meeting, Credit Suisse in Focus

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