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European Stock Futures Higher as Market Digests Federal Reserve Tapering

Stock Markets Nov 04, 2021 03:11AM ET
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By Peter Nurse 

Investing.com - European stock markets are expected to open higher Thursday, with investors digesting the Federal Reserve’s decision to slow its pandemic-era bond-buying program but still keeping an eye on the Bank of England’s policy-setting meeting later.

At 2:10 AM ET (0710 GMT), the DAX futures contract in Germany traded 0.1% higher, CAC 40 futures in France climbed 0.6% and the FTSE 100 futures contract in the U.K. rose 0.5%.

The U.S. central bank announced plans late Wednesday to start trimming its monthly bond purchases in November, potentially ending the program in 2022, judging the U.S. economy sufficiently recovered from the pandemic to begin withdrawing its monetary support.

This move had been widely expected, and importantly the Fed policy makers maintained their stance that high inflation would prove "transitory" and likely not require an early rise in interest rates.

That may prove to be a contrast with the Bank of England, which has been more frank about being under pressure to raise interest rates to defend its credibility. 

The banking sector will be in focus Thursday, with Credit Suisse (SIX:CSGN) announcing plans to pare back its investment bank after posting a 21% fall in third quarter profit and said it expected to report a net loss in the fourth quarter due to a one-off charge of around 1.6 billion Swiss francs.

Societe Generale (OTC:SCGLY) posted better-than-expected third-quarter earnings and launched a share buyback program of around 470 million euros, Commerzbank (DE:CBKG) recorded a better-than-expected third-quarter net profit and forecast a profit for the full year, and ING (AS:INGA) also reported better-than-expected third-quarter pretax profit.

Elsewhere, Deutsche Post (OTC:DPSGY) increased its full-year operating profit forecast once more as global trade recovers, while HeidelbergCement (DE:HEIG), the world's No. 2 cement maker, reported a 11% drop in core profit on the back of higher energy costs.

Novartis (SIX:NOVN) announced plans to sell its one-third voting stake in fellow drug-maker Roche (SIX:RO) back to its cross-town rival for $20.7 billion.

In economic news, the main release will be the final purchasing manager’s index composite data for the Eurozone in October.  German manufacturing orders managed only a weak 1.3% rebound from their August slump, which was revised down even further to -8.8%.

Crude prices weakened Thursday, extending recent losses on the back of an increase in U.S. oil inventories, progress in Iranian nuclear talks and ahead of the latest OPEC+ meeting.

Weekly crude inventory data from the U.S. Energy Information Administration, released late Wednesday, showed a larger-than-expected build of 3.3 million barrels for the week to Oct. 29, rising for the fifth week in six.

Also weighing was the news that Iran and world powers have agreed to resume nuclear talks later this month. This could potentially lead to the U.S. removing sanctions on the country’s oil industry, and thus an increase in global supply.

The Organization of the Petroleum Exporting Countries and their allies including Russia, a group called OPEC+, meet later in the session to discuss overall production levels. The group is expected to reconfirm a monthly increase of 400,000 barrels a day.

By 2:10 AM ET, U.S. crude futures traded 0.4% lower at $80.53 a barrel, after closing Wednesday at their lowest level since Oct. 13, while the Brent contract fell 0.1% to $81.91, having closed at their lowest level since Oct. 7.

Additionally, gold futures rose 0.6% to $1,747.75/oz, while EUR/USD traded 0.3% lower at 1.1580.

 

European Stock Futures Higher as Market Digests Federal Reserve Tapering
 

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