European Stock Futures Lower; Brexit Talks and ECB in Focus

By Peter Nurse 

Investing.com - European stock markets are seen opening marginally lower Thursday, as investors hold their breath with Brexit and U.S. stimulus talks continuing and ahead of a ECB policy meeting.

At 2:05 AM ET (0705 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 0.1%. 

Talks between U.K. Prime Minister Boris Johnson and European Commission President Ursula von der Leyen late Wednesday ended without a breakthrough, confirming very large gaps remain over issues from fisheries to dispute resolution.

The two sides gave themselves until the end of the weekend to seal a new trade pact, with around $1 trillion in annual trade at risk of facing tariffs and quotas if a deal cannot be reached before transition arrangements end on December 31.

On Capitol Hill, U.S. lawmakers were able to approve a stopgap government funding bill on Wednesday, but negotiations over a broader Covid-19 relief package continued with the two sides maintaining differences over aid to state and local governments.

The European Central Bank holds its latest policy-setting meeting later Thursday, and the central bank is widely expected to increase and extend its pandemic bond-buying program.

“The reasons for new ECB action are clear: with the second lockdowns the September projections have become outdated and too optimistic,” said ING analyst Carsten Brzeski, in a research note. “Back then, the ECB had penciled in 3.1% QoQ growth in the fourth quarter. This number will have to be revised downwards significantly.”

Data from the (non-Eurozone) U.K. earlier Thursday illustrated this slowdown, with monthly GDP growth of 0.4% for October, a drop from the 1.1% growth seen the previous month.

In corporate news, Tui (DE:TUIGn), the world's biggest holiday company, posted a loss of 3 billion euros ($3.6 billion) for the financial year, as the pandemic stopped travel and forced it to seek three bailouts from the German government. 

In the U.K., online supermarket expert Ocado (LON:OCDO) raised its full-year guidance again after a strong quarter through the end of November. It now expects EBITDA of 70 million pounds ($94 million), rather than 60 million. 

Oil prices rose Thursday, despite a larger-than-expected build in U.S. crude stocks, on increased confidence a fairly prompt rollout of Covid-19 vaccines will spur a rebound in demand next year.

Crude inventories rose by 15.2 million barrels in the week to Dec. 4, the Energy Information Administration said late Wednesday, compared with expectations for a draw of 1.4 million barrels.

U.S. crude futures traded 0.3% higher at $45.67 a barrel, while the international benchmark Brent contract rose 0.3% to $48.98. Both benchmarks have fallen this week, after previously posting five consecutive weeks of gains, but remain near nine-month highs. 

Elsewhere, gold futures rose 0.1% to $1,839.60/oz, while EUR/USD traded 0.1% higher at 1.2088.