European stock futures mixed; ECB policy decision looms large

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Investing.com - European stock markets are expected to open in a mixed fashion Thursday, as investors await the European Central Bank’s monetary policy decision following the latest hike by the Federal Reserve.

At 02:00 ET (06:00 GMT), the DAX futures contract in Germany traded 0.1% higher and CAC 40 futures in France climbed 0.1%, while the FTSE 100 futures contract in the U.K. fell 0.2%.

The Fed delivered an interest rate hike of 25 basis points on Wednesday, bringing the federal funds rate range to 5%-5.25%, the highest level since August 2007.

The U.S. central bank also signaled it could pause its year-long tightening cycle in June as officials assess inflationary pressures as well as the impact on lending conditions from the series of bank failures.

The spotlight now turns to Europe, with the ECB widely expected to tighten monetary policy, lifting interest rates for the seventh time.

However, the size of the increase remains unclear. 

Most expect officials to lift the benchmark rate by a quarter-point to 3.25% following signs underlying inflation is stabilizing and credit conditions are tightening. But a larger hike of 50 basis points can’t be ruled out as headline inflation remains elevated at 7%.

Ahead of the decision, the economic data slate includes the final services PMI for much of Europe as well as the Eurozone producer prices for March, which is expected to show a fall of 1.7% on the month, an annual increase of 5.9%.

In corporate news, ArcelorMittal (AS:MT), the world’s second-largest steelmaker, reported higher-than-expected first-quarter earnings, and Anheuser Busch Inbev (EBR:ABI), the world's largest brewer, reported higher than expected earnings, helped by sharply higher prices.

Volkswagen (ETR:VOWG_p) reported a sharp rise in revenue in the first quarter, but the German carmaker saw a drop in operating profit after last year's first quarter profit was boosted by commodity hedging.

French IT consulting group Capgemini (EPA:CAPP) reported weaker revenue growth in the first quarter versus the same period of last year, with the French IT consulting group citing a tense economic environment.

Oil giant Shell (LON:RDSa) is also scheduled to report its quarterly earnings. 

Oil prices rose Thursday, rebounding after a three-day plunge on concerns demand in the world’s major consumers will be hit as interest rate increases stunt economic growth.

U.S. oil inventories continued to shrink, official data from the Energy Information Administration showed, falling just over one million barrels last week.

By 02:00 ET, U.S. crude futures traded 0.9% higher at $69.22 a barrel, while the Brent contract climbed 1.2% to $73.19.

Both benchmarks were trading down between 8% and 11% for the week, and were close to their lowest levels since December 2021.

Additionally, gold futures rose 0.7% to $2,051.00/oz, while EUR/USD traded 0.2% higher at 1.1084.