By Peter Nurse
Investing.com - European stock markets are expected to open lower Thursday, with investors cautious ahead of a key meeting of the European Central Bank against a backdrop of rising inflation and slowing global growth.
At 2 AM ET (0600 GMT), the DAX futures contract in Germany traded 0.5% lower, CAC 40 futures in France dropped 0.5% and the FTSE 100 futures contract in the U.K. fell 0.9%.
Equity markets globally are struggling to post further gains amid concerns that the recent delta-variant Covid-19 outbreaks will slow the economic recovery just as central banks gradually begin to withdraw monetary policy support to bring inflation back down.
With this in mind, the European Central Bank’s meeting is the main focus Thursday, with the central bank’s policy makers having to decide whether the region’s recovery is strong enough to warrant an imminent slowdown in monetary stimulus.
"The Covid-19 pandemic is clearly not over. Against this background, the ECB is unlikely to be ready to call an end to the PEPP [pandemic emergency purchase program] at its meeting,” said analysts at Nordea, in a note.
Asian stock markets sold off earlier Thursday, hit by renewed concerns about China’s regulatory tightening after the country’s authorities summoned gaming companies, including Tencent Holdings (OTC:TCEHY) and NetEase (NASDAQ:NTES). to discuss new rules for the sector.
Additionally, China's factory gate inflation hit a 13-year high in August, with the producer price index rising 9.5% from a year earlier in August, driven by sharply rising raw materials prices.
In corporate news, quarterly earnings from WM Morrison (LON:MRW) will be studied carefully given the U.K. supermarket chain is currently in the middle of a takeover battle.
Numbers are also expected from Lloyd’s of London, and this follows reinsurer Swiss Re (OTC:SSREY) saying it expected non-life insurance premiums to rise 10% above pre-pandemic levels by the end of 2021, driven in part by a growing need for protection against the impact of climate change.
Crude prices stabilized Thursday as the impact of Hurricane Ida on the output of the U.S. Gulf of Mexico region starts to fade.
Data from the American Petroleum Institute, released late Wednesday, showed that crude drawdown for the week ended Sept. 3 was smaller than expected at just under 3 million barrels, but U.S. gasoline stocks fell by a hefty 6.4 million barrels.
Official crude supply data from the U.S. Energy Information Administration are due later in the day.
By 2 AM ET, U.S. crude futures traded 0.1% higher at $69.39 a barrel, while the Brent contract rose 0.2% to $72.75.
Additionally, gold futures fell 0.3% to $1,788.85/oz, while EUR/USD traded flat at 1.1814.