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European Stock Futures Edge Higher; BoE Policy Meeting in Spotlight

Stock Markets Aug 04, 2022 02:00AM ET
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© Reuters

By Peter Nurse

Investing.com - European stock markets are expected to open marginally higher Thursday, as investors cautiously await the Bank of England's latest policy-setting meeting as well as more quarterly corporate earnings.

At 02:00 AM ET (0600 GMT), the DAX futures contract in Germany traded 0.4% higher, CAC 40 futures in France climbed 0.1%, and the FTSE 100 futures contract in the U.K. also rose 0.1%.

European equities are expected Thursday to largely build on the previous session’s gains, helped by largely positive corporate earnings as well as a strong close on Wall Street after the U.S. ISM non-manufacturing purchasing managers index showed a surprise rebound in July, diluting fears of a recession.

However, gains are likely to be tepid with the Bank of England expected to raise interest rates by the most since 1995 later Thursday, as the central bank attempts to tackle inflation which hit 9.4% in June, a new 40-year high.

The BoE has already raised borrowing costs five times since December, and is widely expected to increase its benchmark rate by half a percentage point to 1.75%, its highest level since late 2008 at the start of the global financial crisis.

Elsewhere, the second-quarter earnings season continues in full flow.

Credit Agricole (EPA:CAGR) continued the strong run for Europe’s banks, announcing better-than-expected quarterly profits amid record activity in its investment banking division.

Agriculture and pharmaceuticals company Bayer (ETR:BAYGN) lifted its 2022 earnings guidance on strong demand for its seeds and crop chemicals and higher sales of consumer health products.

On the flip side, Adidas (ETR:ADSGN) said its operating profit fell by 28% in the second quarter despite rising sales, hit by the suspension of business in Russia, higher supply chain costs and COVID-19 lockdowns in China and Vietnam.

Lufthansa (ETR:LHAG) said it would offer only around 80% of pre-crisis passenger capacity in the third quarter, less than previously planned, amid staffing shortages at airports and airlines.

Oil prices edged lower Thursday, continuing the previous session’s sharp losses on the back of data suggesting weakening U.S. demand as well as a small output increase by OPEC+ producers.

Both benchmarks fell by around 4%, to their weakest levels since February, on Wednesday after data from the Energy Information Administration showed crude inventories rose 4.5 million barrels last week and gasoline stockpiles gained 200,000 barrels.

These increases in stocks could point to a weakening of demand in the world’s largest consumer, and are particularly noteworthy in the summer driving season.

Additionally, the Organization of Petroleum Exporting Countries and its allies, a group known as OPEC+, agreed to increase production by 100,000 barrels per day in September.

This small increase to the group's output target, equal to about 0.1% of global oil demand, followed the United States asking the group to boost output. But it’s unlikely to have much of an impact given demand forecasts continue to be revised lower, suggesting the global market will remain tight.

By 02:00 AM ET, U.S. crude futures traded 0.1% lower at $90.59 a barrel, while the Brent contract fell 0.2% to $96.56.

Additionally, gold futures rose 0.6% to $1,786.80/oz, while EUR/USD edged higher at 1.0165.

European Stock Futures Edge Higher; BoE Policy Meeting in Spotlight
 

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Comments (2)
Adamo Nals
Adamo Nals Aug 04, 2022 5:41AM ET
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It doesn’t make sense because we have a Super Bubble in the market a Super Bubble and housing and a super bubble with a triple inverted yield curve. Any day the financial market will collapse. On top of 9 trillion on the balance sheet that has to be taken down amd NOW unstoppable rate hikes for years to come. Period. $205 a share times 14 exitus 2870 on the S&P 500. We are 1400 points overvalued right now. I would say 2500 on the S&P is appropriate. So many so-called professionals are just completely hypnotized and brainwashed by BS and wishful thinking
marlow seay
marlow seay Aug 04, 2022 3:21AM ET
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makes no sense
Rupesh Agrawal
Rupesh Agrawal Aug 04, 2022 3:21AM ET
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yes.. But market behave which makes no sense.. be ready for big sell off.. This week or next week..
Adamo Nals
Adamo Nals Aug 04, 2022 3:21AM ET
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Rupesh Agrawal spot on. And I mean a huge selloff. 20 to 25%
 
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