Mixed European Stock Futures; German Q1 GDP disappoints
Investing.com – European stock markets are expected to trade mixed at the open on Thursday cautiously, with investors digesting growth data and consumer sentiment from Germany, as well as ongoing negotiations on the debt ceiling for USA
As of 0200 ET (0600 GMT), the contract in Germany was trading 0.1% higher, the contract in the UK was up 0.1%, while the contract in France was down 0.1%.
Europe’s data calendar is fairly light on Thursday, but there are some big numbers coming out of Germany for investors to focus on.
Germany’s first quarter release is a highlight as it confirms that Europe’s largest economy contracted in the first three months of the year, with growth dipping 0.3% in the quarter.
This translated into a drop in growth of 0.2% compared to the first quarter of last year.
The June report also showed sentiment remained weak in the euro zone’s main growth engine, with the index improving slightly to -24.2 in June from -25.7 the previous month.
Data released on Wednesday showed Germany’s business outlook deteriorated for the first time since October, with an Ifo institute’s expectations gauge falling to 88.6 in May from 91.7 the previous month.
However, despite this negative outlook, it must increase borrowing costs further to return to its target, Governing Council member Bostjan Vasle said in an interview with a Slovenian newspaper on Thursday.
Vasle joins several other members of the ECB’s 26-member Governing Council in calling for further increases that could still persist beyond the summer months.
Investors are also concerned about the slow progress in negotiations on raising the US debt ceiling.
Ratings agency Fitch flagged the possibility of a downgrade to the US’s ‘AAA’ rating on Wednesday night, saying that while it still expected lawmakers to reach an agreement before the early June deadline, the Current uncertainty had posed risks of a possible US default. .
Corporate profits are slated for the likes of the food giant tate and lyle (LON:), specialty chemicals company johnson matthey (LON:) and water supply company united public services (LON:), while the chipmaking sector is likely to be in the spotlight after a strong outlook from Nvidia (NASDAQ:).
Oil prices eased on Thursday, pulling back from three-week highs amid mounting pressure from a strong dollar as uncertainty mounted over the US debt ceiling negotiations.
The US currency rose to a two-month high overnight on expectations that US rates will stay higher for longer, making crude more expensive for international buyers and stifling demand.
As of 02:00 ET, futures were trading 0.5% lower at $73.94 a barrel, while the contract fell 0.4% to $78.06.
Both benchmarks rose nearly 2% on Wednesday after official data showed they plunged more than expected last week.
Furthermore, it fell 0.5% to $1,955.60/oz, while trading 0.2% lower at 1.0732.