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European Stock Futures Mixed Ahead of Fed; Rio Tinto, Deutsche Bank Earnings Eyed

Stock MarketsJul 28, 2021 02:06AM ET
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By Peter Nurse - European stock markets are expected to open largely unchanged Wednesday, as investors digest continued weakness in Asian markets on China’s regulatory crackdown, more corporate earnings and the outcome of the latest Federal Reserve meeting.

At 2:05 AM ET (0605 GMT), the DAX futures contract in Germany traded 0.1% lower, the FTSE 100 futures contract in the U.K. fell 0.1%, while the CAC 40 futures in France rose 0.2%.

Asian markets weakened Wednesday, falling for a third straight session and hitting sentiment in Europe, as investors continued to fret about the regulatory crackdowns by the Chinese authorities.

That said, losses were more subdued as China’s state-run financial media tried to calm the issue. Additionally, investors across the region will be reluctant to take large positions ahead of the conclusion of the latest policy-setting meeting from the U.S. Federal Reserve.

The Fed is widely expected to keep interest rates at record lows. leaving the focus on when the central bank will start reducing its purchases of government bonds and on any fresh developments as regards its views on inflation and growth.

Turning to corporate news, Deutsche Bank (DE:DBKGn) is likely to be in the spotlight Wednesday after the German banking giant easily beat profit expectations for the second quarter even with a drop in revenue at its important investment banking division. It also updated its revenue guidance for 2022. Elsewhere, mining giant Rio Tinto (LON:RIO) fell short of expectations but declared a special dividend of $3 billion after a windfall on sky-high iron ore and copper prices.

The tech sector will also be in focus after Google parent Alphabet (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT), and Apple (NASDAQ:AAPL) all reported strong quarterly earnings after the close on Wall Street Tuesday. The three giants generated a total of $57 billion in the quarter, an average of $626 million a day.

In economic news, the GfK German consumer climate index stuck at -0.3 in August, unchanged from the previous month but below expectations as the rising Covid cases weighed on sentiment.

Elsewhere, oil prices rose Wednesday, boosted by an industry report which showed a decline in U.S. crude stocks, suggesting healthy demand in the world’s largest consumer.

U.S. crude oil supply data released on Tuesday by the American Petroleum Institute showed a draw of 4.7 million barrels for the week ended July 23, after a build of 806,000 barrels the previous week.

Investors now await official numbers data from the U.S. Energy Information Administration later in the day to see if this fall is confirmed.

At 2:05 AM ET, U.S. crude futures traded 0.7% higher at $72.12 a barrel, while the Brent contract rose 0.5% to $73.86.

Additionally, gold futures rose 0.4% to $1,806.05/oz, while EUR/USD traded largely unchanged at 1.1816.


European Stock Futures Mixed Ahead of Fed; Rio Tinto, Deutsche Bank Earnings Eyed

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