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European Stock Futures Lower; Global Selloff Continues

Stock MarketsMay 12, 2021 07:34
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By Peter Nurse - European stock markets are seen opening lower Wednesday, continuing the recent global selloff as surging commodity prices and growing inflationary pressure in the United States stoke concerns of early rate hikes.

At 2:05 AM ET (0705 GMT), the DAX futures contract in Germany traded 0.4% lower, CAC 40 futures in France dropped 0.7% and the FTSE 100 futures contract in the U.K. fell 0.4%. 

The blue-chip Dow Jones Industrial Average closed 1.4%, or almost 500 points, lower Tuesday, its worst day since February, while Asia has largely followed suit, with both Japan’s Nikkei and South Korea’s KOSPI down 1.6%.

Economic data released on Tuesday showed job openings at U.S. companies jumped to a record high in March, suggesting the labor supply is not keeping up with surging demand as employers scramble to find qualified workers. This points to increasing wage inflation going forward.

Investors will thus be keeping a close eye on the U.S. consumer price index for April, due at 8:30 AM ET (1230 GMT), which is expected to grow 0.2% from the previous month, a 3.6% jump from last year. 

While the year-over-year reading will be distorted by base effects from last year's pandemic-induced plunge in energy prices, such a jump would be the largest since September 2011. 

Ahead of that, and back in Europe, the U.K.’s GDP contracted 1.5% in the first quarter as the country’s government took the first steps to exit the Covid-19 restriction measures only in early March.

In corporate news, Commerzbank (DE:CBKG) swung to a first quarter profit, beating expectations, as the German lender undergoes a major restructuring, while Bayer (OTC:BAYRY) reported a rise in net profit despite slightly lower sales and upheld its outlook for the year.

In a busy day of earnings, releases are also due from the likes of EDF (PA:EDF), Allianz (DE:ALVG), Tui (DE:TUIGn), Aegon (NYSE:AEG) and RWE (DE:RWEG).

Oil prices stabilized Wednesday, after a volatile few days, as a drop in U.S. crude stockpiles reassured traders that the recovery in demand remains on track.

U.S. crude inventories fell by 2.5 million barrels for the week ended May 6, according to an estimate released Tuesday by the industry body the American Petroleum Institute. The official government inventory report, due later Wednesday, is expected to largely confirm this report. 

Meanwhile, Colonial Pipeline, the largest fuel pipeline in the United States, has still only restarted a small section in the five days since its shutdown following Friday’s cyber attack, and doesn’t expect substantial restoration of service before the weekend. 

U.S. crude futures traded 0.1% higher at $65.35 a barrel, the Brent contract rose 0.1% to $68.61, while gasoline futures on the New York Mercantile Exchange dropped 0.4% to $2.1313 a gallon.

Additionally, gold futures fell 0.3% to $1,830.60/oz, while EUR/USD traded 0.2% lower at 1.2127.


European Stock Futures Lower; Global Selloff Continues

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