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European Stock Futures Edge Lower; Fed Meeting in Focus

Stock MarketsNov 02, 2021 02:59AM ET
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By Peter Nurse - European stock markets are expected to open with small losses Tuesday, handing back some of the previous session’s gains ahead of the start of an eagerly-awaited Federal Reserve meeting.

At 2 AM ET (0700 GMT), the DAX futures contract in Germany traded 0.2% lower, CAC 40 futures in France dropped 0.1% and the FTSE 100 futures contract in the U.K. fell 0.2%.

Investors around the world are focusing on the start of the Fed’s two-day policy-setting meeting later Tuesday, with the central bank widely expected to start winding down its $120 million monthly bond-buying program. 

The Fed will likely have to update its thinking about rising prices, and consequently about when it will start raising interest rates, as inflation is running at a 30-year high. What it says on this subject will be an important determinant of risk appetite in the weeks ahead.

Ahead of this, there are a number of corporate earnings for investors to focus on, with the generally positive third-quarter season having helped the main European indices post gains of just under 1% on Monday.

U.K.-based bank Standard Chartered (OTC:SCBFF) posted a stronger-than-expected pretax profit for the third quarter, aided by lower credit charges and growth in trade finance, while Swiss staffing company Adecco (SIX:ADEN) expects fourth-quarter revenues to grow modestly due to a continued increase in hiring across the continent.

Earnings from the likes of energy giant BP (NYSE:BP), German health care company Fresenius (DE:FREG) and Dutch health nutrition firm DSM (AS:DSMN) are also out. Elsewhere, shipping giant AP Moeller - Maersk  (CSE:MAERSKb) said it will increase its existing buyback program by $5 billion, expecting exceptionally high shipping rates to stay strong through the first quarter of next year at least. 

Investors will also follow the ongoing COP26 conference in Glasgow, a U.N. conference aimed at limiting the effects of climate change, with one hundred countries having given themselves nine years to halt and reverse deforestation, backed by a fund of $19 billion.

In economic news, the main release Tuesday will be the German manufacturing PMI for October.  

Crude prices edged higher Tuesday with preliminary October output data for the top producers suggesting the global supply situation remains tight.

The Organization of the Petroleum Exporting Countries meets with allies including Russia later this week to discuss their production levels.

According to a Reuters survey, the group increased output by 190,000 barrels per day over the month, below the 254,000 b/d they could have increased output by under their current deal. 

The American Petroleum Institute will also release its latest U.S. crude oil supply data at 4:30 PM ET.

By 2 AM ET, U.S. crude futures traded 0.3% higher at $84.28 a barrel, while the Brent contract rose 0.5% to $85.11. 

Additionally, gold futures were largely unchanged at $1,795.80/oz, while EUR/USD edged higher to 1.1608.


European Stock Futures Edge Lower; Fed Meeting in Focus

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