European Stock Futures Mixed; Russia/Ukraine Talks, ECB Meeting in Focus

  • Stock Market News
European Stock Futures Mixed; Russia/Ukraine Talks, ECB Meeting in Focus
Credit: © Reuters.

By Peter Nurse - European stock markets are expected to open in a mixed fashion Thursday, as investors digest wild swings in oil prices ahead of new high-level Russia/Ukraine talks and the latest policy-setting European Central Bank meeting.

At 2:05 AM ET (0705 GMT), the DAX futures contract in Germany traded 0.4% lower, CAC 40 futures in France dropped 0.5%, while the FTSE 100 futures contract in the U.K. rose 0.5%.

European equities posted strong gains on Wednesday, with the DAX and the CAC 40 both gaining over 7%, after crude prices suffered their biggest one-day drop in almost two years amid indications major producers could increase supply to attempt to make up for the disruptions caused by the Western sanctions on Russia.

Comments from UAE's ambassador to Washington saying his country will be encouraging OPEC to consider higher output to fill the supply gap as well as reports that Iraq was prepared to increase production resulted in hefty falls in the price of crude. They have since rebounded to a certain extent.

By 2:05 AM ET, U.S. crude futures traded 1.5% higher at $110.37 a barrel, having fallen more than 12% on Wednesday, its worst day since late November. The Brent contract rose 2.7% to $114.09, after dropping 13%, the largest one-day drop since April 2020.

Markets have been roiled over the last couple of weeks by Russia’s invasion of Ukraine, with commodity prices, and oil in particular, soaring to record levels, raising stagflation fears.

Sentiment was also lifted with Russia's foreign minister Sergei Lavrov set to meet with his Ukrainian counterpart Dmytro Kuleba in Turkey later Thursday, the first get together between the two since Russia’s invasion.

These talks are taking place amid mounting fury in the West, and the potential for further sanctions, over Ukraine's accusation of Russia bombing a children’s hospital in the city of Mariupol.

Investors will also be watching the latest policy-setting meeting from the European Central Bank later Thursday, with the policymakers having to walk the tightrope caused by surging energy prices likely exacerbating already record-high inflation as well as slowing growth.

The central bank had been expected to announce the end to its emergency bond purchases, opening the way for an interest rate hike late this year. However, the high uncertainty caused by the Ukraine conflict is likely to stay its hand this month.

In corporate news, earnings from Hugo Boss (DE: BOSSn ) will be in the spotlight Thursday, while investors will be watching out for any more announcements over the impact of the Russian invasion on the corporate sector.

Additionally, gold futures fell 0.1% to $1,986.90/oz, while EUR/USD traded 0.2% lower at 1.1054.

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