European stock futures higher; Fed speakers soothe nerves

  • Stock Market News
European stock futures higher; Fed speakers soothe nerves - European stock markets are expected to open higher Tuesday, with investors returning their focus to potential central bank moves while keeping an eye on the conflict in the Middle East.

At 02:00 ET (06:00 GMT), the DAX futures contract in Germany traded 0.3% higher, CAC 40 futures in France climbed 0.3% and the FTSE 100 futures contract in the U.K. rose 0.2%. 

Central bank speakers boost confidence

A degree of calm has returned to global equity markets, with Europe being no exception, helped by relatively dovish comments by Federal Reserve officials which helped to settle nerves which had been frayed by the deepening conflict between Israel and the Palestinian Islamist group Hamas.

Fed Vice Chair Philip Jefferson said the central bank could "proceed carefully" in deciding whether any further increases are warranted, while Dallas Fed President Lorie Logan indicated rising Treasury yields could steer the Fed from further rate increases.

There are a number of Fed officials due to speak later Tuesday, ahead of the release of the minutes of the September monetary policy meeting on Wednesday and then Thursday’s U.S. CPI data.

Additionally, the IMF and World Bank annual meetings in Morocco get into full swing, with European Central Bank President Christine Lagarde set to make an appearance later in the session.

Italian industrial production due

The economic data slate is pretty empty in Europe Tuesday, with the main release being the August Italian industrial production number. 

This is expected to show an annual fall of 5.0%, a deterioration from the previous month’s 2.1% drop, an indication of the difficulties the region is having the day after the equivalent release added fuel to fears of a potential recession in Germany, the eurozone's largest economy.

PepsiCo earnings due

In corporate earnings news, PepsiCo (NASDAQ: PEP ) will be the day’s highlight, with the soft drinks giant likely to post a rise in third quarter revenues.

Elsewhere, the Financial Times reported that the European Union is planning to announce anti-subsidy investigations against Chinese steelmakers at a summit with the U.S. this month.

Crude retreats as Middle East conflict continues

Oil prices slipped lower Tuesday, handing back some of the previous session’s sharp gains with traders keeping a wary eye on the conflict in the Middle East and the potential for supply disruptions.

By 02:00 ET, the U.S. crude futures traded 0.7% lower at $85.84 a barrel, while the Brent contract dropped 0.7% to $87.58. 

Both benchmarks surged more than 4% on Monday after Hamas launched the largest military assault on Israel in decades over the weekend, prompting severe retaliation from Israel with a wave of air strikes on Gaza.

Traders fretted that the conflict could escalate, hitting Middle East supply and worsen an expected deficit for the rest of the year.

Additionally, gold futures rose 0.4% to $1,872.55/oz, while EUR/USD traded 0.1% lower at 1.0562.


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