European Stock Futures Higher; Fed Meeting, BP Results in Spotlight

  • Stock Market News
European Stock Futures Higher;  Fed Meeting, BP Results  in Spotlight
Credit: © Reuters.

By Peter Nurse - European stock markets are expected to open higher Tuesday, with investors focusing on the start of the Federal Reserve’s latest two-day policy-setting meeting.

At 03:00 ET (07:00 GMT), the DAX futures contract in Germany traded 0.7% higher, CAC 40 futures in France climbed 0.9% and the FTSE 100 futures contract in the U.K. rose 0.7%.

The U.S. central bank is widely expected to raise interest rates by 75 basis points on Wednesday at the conclusion of its meeting. 

Investors appear to be gaining confidence, with stocks flirting globally with their strongest levels in just over a month, that the Fed will offer up a treat and flag a reduction in the pace of its interest rate hikes in the future, potentially starting in December.

That said, there's little sign that inflation is peaking in Europe.

ECB President Christine Lagarde said, in an interview Tuesday, that the peak of the current cycle of interest-rate increases must ensure that inflation returns to the 2% target over the medium term.

Eurozone consumer prices increased by 10.7% last month from 9.9% a month earlier, data showed on Monday, suggesting the ECB still has a fair way to go with its rate hikes. 

Additionally, German import prices rose by a hefty 29.8% on an annual basis in September, better than expected but still only a small drop from the 32.7% increase seen the previous month.

The U.K. manufacturing PMI release is due later in the session, and is expected to show that this sector of the British economy remained in contraction in October. 

In the corporate sector, energy giant BP (NYSE: BP ) is scheduled to report its quarterly results, and is expected to post bumper profits after peer Shell (LON: SHEL ) posted a third-quarter profit of $9.45 billion late last week, allowing it to buy back up to another $4 billion in stock and raise its dividend by 15%.

Credit Suisse (SIX: CSGN ) confirmed an extraordinary general meeting will take place on November 23 for shareholders to approve a proposed capital increase, as the Swiss lender hopes to raise 4 billion Swiss francs ($4.01 billion) in fresh capital.

Oil prices rose Tuesday, paring losses from the previous session, with a weaker dollar helping boost confidence that has been hit by a resurgence in COVID-19 cases in China, the world’s largest crude importer.

Also boosting sentiment was the decision of the Organization of Petroleum Exporting Countries to lift its medium to long term demand forecasts, saying on Monday in its 2022 World Oil Outlook that demand will be higher than initially expected in the medium to long term, and will likely plateau by only 2045.

By 03:00 ET, U.S. crude futures traded 1.4% higher at $87.75 a barrel, while the Brent contract rose 1.5% to $94.19. Both benchmarks fell over 1% on Monday. 

Additionally, gold futures rose 0.4% to $1,647.80/oz, while EUR/USD traded 0.5% higher at 0.9930.

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