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European stock futures market poise for a mixed start today as investors grapple with rising inflation, surging bond yields, and global economic uncertainties.
DAX Futures in Germany Gain, CAC 40 Futures Rise, FTSE 100 Futures Fall
At 02:00 ET (06:00 GMT), the German DAX futures contract edged up by 0.3%, while France’s CAC 40 futures climbed 0.2%. Conversely, the UK’s FTSE 100 futures contract slipped 0.1%.
European investors remain on edge due to concerns about the possibility of prolonged high-interest rates, prompted by a surge in U.S. Treasury yields, which led to substantial losses on Wall Street.
U.S. Equities Experience Significant Losses
Major U.S. equity indexes, including the Dow Jones Industrial Average, the S&P 500, and the Nasdaq, all suffered losses exceeding 1% on Tuesday. It marked the Dow’s worst day since March, with the S&P 500 and Nasdaq on course for their largest monthly declines this year, at 5% and 7%, respectively.
On a positive note, data from Asia revealed a robust rebound in Chinese industrial profits for August, helping to narrow year-to-date declines. This data has sparked optimism regarding a Chinese economic recovery.
Read More: US Consumer Confidence Drops in September
ECB to Maintain High Rates on European stock futures
In Europe, Germany’s 10-year bond yield has reached its highest point since 2011, influenced by the U.S. trend. The European Central Bank, while recently increasing interest rates, hinted at a prolonged period of high rates to combat inflation.
The forward-looking German GfK consumer climate index declined to -26.5 in October, reflecting ongoing fragility in the eurozone’s largest economy. French consumer confidence data for September is also anticipated to show a slight drop.
Oil Prices Rise Amidst U.S. Stockpile Release
Oil prices climbed as market attention turned to supply constraints following the release of the latest U.S. inventory data, as winter approaches. This lead to high European stock futures.
Mixed U.S. Inventory Data
Data from the American Petroleum Institute revealed a 1.6 million barrel increase in U.S. crude oil stockpiles last week, contrary to expectations of a minor decrease. However, gasoline and distillate inventories declined, indicating stable fuel demand despite the conclusion of the summer travel season.
Official inventory data from the Energy Information Administration is due later today.
Commodity and Currency Markets
At 02:00 ET, U.S. crude futures traded 1.1% higher at $91.35 a barrel, while the Brent contract rose by 0.9% to $93.22. Gold futures fell 0.2% to $1,915.25/oz, and EUR/USD traded 0.1% lower at 1.0565.
Disclaimer: Please note that this article serves solely for informational purposes and should not be construed as financial advice. We strongly advise readers to conduct thorough research and consult with financial professionals before making any investment decisions.
