European Stock Futures Mixed as J&J Vaccine News Blunts Inflation Threat

© Reuters.

By Peter Nurse 

Investing.com - European stock markets are seen opening mixed Wednesday, largely continuing the positive global trend on the back of falling bond yields as U.S. inflation concerns eased, although other concerns over Covid-19 remain.

At 3:05 AM ET (0705 GMT), the DAX futures contract in Germany traded 0.2% higher, the FTSE 100 futures contract in the U.K. rose 0.1%, while CAC 40 futures in France dropped 0.6%. 

Wall Street ended mostly higher Tuesday, with the broad-based S&P 500 index posting another record close, and Asian stock markets have largely followed suit as key U.S. Treasury yields fell to a fresh three-week low after data showed U.S. inflation was not spiralling out of control.

The U.S. consumer price index rose 0.6% in March, the biggest increase since August 2012, but the market had seemingly positioned for a higher figure as rising vaccinations and fiscal stimulus released pent-up demand. 

This CPI number is unlikely to change Federal Reserve Chair Jerome Powell's view that higher inflation in coming months will be transitory, and thus the central bank’s monetary policy can still remain ultra easy, to the benefit of global stock markets. The benchmark 10-year U.S. Treasury yield dropped as low as 1.61%, partly as a result of that, and partly because of other news that put a dampener on economic reopening trades.

Johnson & Johnson (NYSE:JNJ) has delayed the rollout of its Covid-19 vaccine outside the U.S. after the U.S. federal health agencies recommended pausing the use of the drug due to blood clotting worries.

This is the second vaccine, after AstraZeneca’s, to have such issues, and may further delay the EU's vaccination program, which may in turn delay a return to economic normality. Germany, which has still vaccinated less than 25% of its population, extended its lockdown by another three weeks on Monday.

In the corporate sector, luxury stocks will be in focus after Christian Dior  (PA:DIOR) and LVMH  (PA:LVMH) both reported a strong start to the year after the close on Monday. 

Dutch mapping company TomTom (AS:TOM2) said its net loss for its first quarter narrowed significantly, but most eyes will be on the start of the earnings season on Wall Street, with banking giants JPMorgan Chase (NYSE:JPM), Goldman Sachs (NYSE:GS) and Wells Fargo (NYSE:WFC) reporting before the bell. 

Bank stocks have risen sharply so far this year, and analysts are expecting strong investment banking results to cement these gains.

Oil prices pushed higher Wednesday after industry data showed U.S. oil inventories declined more than expected last week, a sign of growing demand in the largest oil consumer in the world.

Crude stocks fell by 3.6 million barrels in the week ended April 9, according to data from the American Petroleum Institute, compared with forecasts for a decline of about 2.2 million barrels prepared by Investing.com.

Official inventory figures from the U.S. Energy Information Administration are due later Wednesday.

The Organization of the Petroleum Exporting Countries lifted its forecast for world oil demand growth this year on Tuesday, expecting the pandemic to subside as vaccination programs ramp up and thus travel curbs to be eased.

U.S. crude futures traded 1.2% higher at $60.88 a barrel, while the Brent contract rose 1.1% to $64.34. 

Elsewhere, gold futures fell 0.1% to $1,745.75/oz, while EUR/USD traded 0.2% higher at 1.1966.