European Stock Futures Higher; HSBC Linked With Breakup

  • Stock Market News
European Stock Futures Higher; HSBC Linked With Breakup

By Peter Nurse - European stock markets are expected to open higher Tuesday, starting the new month on a positive note as investors await more corporate earnings and the prospect of key central banks tightening monetary policy.

At 2 AM ET (0600 GMT), the DAX futures contract in Germany traded 0.6% higher, CAC 40 futures in France climbed 0.6%, and the FTSE 100 futures contract in the U.K. rose 0.6%.

European equity markets are trying to shake off a weak showing in April, with the major indices weighed by concerns about economic growth slowing, rising inflation, and Russia’s ongoing war in Ukraine.

A lot of attention will be on central banks this week as a number hold policy-setting meetings that could determine market sentiment for weeks to come.

The Reserve Bank of Australia started the ball rolling earlier Tuesday, raising its main cash rate by 25 basis points to 0.35%, its first hike in more than a decade, as the central bank began withdrawing its extraordinary monetary support.

The Federal Reserve starts its two-day later Tuesday, and is expected to raise rates by a half-point when it hands down its policy decision on Wednesday. The Fed raised its policy interest rate by 25 basis points in March and is soon likely to begin asset trimming, as it tightens its monetary policy.

The Bank of England will also hand down its policy decision on Thursday, and is expected to raise interest rates to their highest level in 13 years.

In the corporate sector, HSBC (LON: HSBA ) is likely to be in focus after its largest shareholder, Chinese insurance giant Ping An (OTC: PNGAY ), called for a break-up of the U.K.-headquartered bank, one of Europe’s largest.

Logitech (NASDAQ: LOGI ) reported a 20% drop in sales for its fourth quarter, and the computer hardware manufacturer reduced its fiscal year 2023 outlook, removing the estimate of annual sales and profits that would have been generated in Ukraine and Russia.

Elsewhere, German unemployment data for April are due later in the session along with the March Eurozone PPI release.

Oil prices edged lower Tuesday but remained elevated as the European Union is expected to firm up plans to tighten sanctions on Russia this week, potentially agreeing an embargo on Moscow’s oil.

There has been disagreement within the bloc over whether to take this next step, but expectations are rising with Germany, the union’s largest economy and de facto leader, saying it was prepared to back an immediate embargo. A deal could include exceptions for Hungary and Slovakia, both heavily dependent on Russian oil imports.

U.S. inventory data for the week ended April 29 from the American Petroleum Institute industry group are due later in the session, as a precursor for government data from the Energy Information Administration on Wednesday.

By 2 AM ET, U.S. crude futures traded 0.2% lower at $104.95 a barrel, while the Brent contract fell 0.3% to $107.30. 

Additionally, gold futures fell 0.1% to $1,860.99/oz, while EUR/USD traded 0.1% higher at 1.0507.

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