By Peter Nurse
Investing.com - European stock markets are seen opening mixed Monday, with the German market underperforming after weak economic data. However, trading ranges are seen limited given the U.S. holiday and the approach of Thursday’s meeting of the European Central Bank.
At 2:05 AM ET (0605 GMT), the DAX futures contract in Germany traded 0.3% lower, CAC 40 futures in France climbed 0.6%, while the FTSE 100 futures contract in the U.K. rose 0.4%.
Earlier Monday, German industrial output disappointed, climbing just 1.2% in July, below the 4.7% increase expected.
This release surprised the market after a release from the Ifo institute had suggested on Monday that German industrial firms expect production to increase slightly in the coming months.
"The industrial sector - the engine of Germany's economy - is gradually getting back on track," Klaus Wohlrabe, who runs surveys at Ifo, said in a statement. The Ifo indicator - not to be confused with its better-known business climate inde - rose to 15.4 points in August from 14.3 points in July.
Earlier Monday, data from China painted a mixed picture of the recovery by the second-largest economy in the world. China's exports rose for the third consecutive month in August, climbing 9.5% from a year earlier, the strongest gain since March 2019. On the flip side, imports slumped 2.1%. In part, that was a reflection of slower stockpiling after aggressive buying of industrial commodities, especially oil, in July.
Still, volumes are likely to be limited and trading ranges tight in Europe Monday, with the important U.S. market closed for the Labor Day holiday, particularly after the dominant tech sector showed signs of weakness towards the end of last week.
“Risk assets remain fragile following Thursday’s tech-led rout and volatility spike … with stimulus having been key for supporting equities and such lofty valuations, its renewal will be crucial not only for the recovery, but as a driver for equities as job risks mount,” Medley Global Advisors managing director for global macro strategy Ben Emons told Bloomberg.
Investors will also be wary ahead of Thursday’s policy meeting at the European Central Bank. While the central bank is expected to keep policy steady, there will be a fresh set of economic projections to digest. Additionally, after the recent Federal Reserve announcement, there may also be interest in the ECB’s own strategy review.
Oil prices dropped Monday, hitting their lowest levels since July, after Saudi Arabia, the world’s top oil exporter, cut its October official selling price for the Arab Light crude it sells to Asia by the biggest margin since May.
The market remains oversupplied despite the efforts of the top producers to rein in production as demand still remains curtailed by the impact of the coronavirus pandemic.
U.S. crude futures traded 1.8% lower at $39.04 a barrel, while the international benchmark Brent contract fell 1.6% to $42.00.
Elsewhere, gold futures rose 0.1% to $1,935.80/oz, while EUR/USD traded 0.1% lower at 1.1830.