European stock futures muted; Powell testimony in focus

  • Stock Market News
European stock futures muted; Powell testimony in focus
Credit: © Reuters.

By Peter Nurse - European stock markets are expected to open largely unchanged Tuesday, as investors look to testimony from Fed chief Jerome Powell to Congress for clues on future monetary policy. 

At 02:00 ET (07:00 GMT), the DAX futures contract in Germany traded 0.1% lower, the FTSE 100 futures contract in the U.K. fell 0.1%, while CAC 40 futures in France climbed 0.1%.

European equities are likely to trade in a subdued manner Tuesday, with the main focus of investors on the Federal Reserve Chair Jerome Powell's testimony before Congress, starting with the Senate Banking Committee later Tuesday.

Powell talked about a "disinflationary process" at his last press conference, but inflation has surprised to the upside since then and investors will be looking for any message about the future pace of interest rate increases.

Back in Europe, inflation has also proved to be stickier than previously expected, prompting Austrian central bank chief Robert Holzmann, a known hawk, on Monday to call for the European Central Bank to lift interest rates by 50 basis points at each of its next four meetings. 

German factory orders rose 1% on the month in January, after gaining a revised 3.4% the prior month, while Spanish industrial production is expected to fall 0.6% on an annual basis in the same month. The ECB is also set to issue its consumer expectations survey.

This followed China reporting a record trade surplus in February, driven largely by a smaller-than-expected decline in exports as manufacturing activity recovered on fewer COVID-19 disruptions, although the country’s imports also shrank far more than expected. 

In the corporate sector, Brenntag (ETR: BNRGn ) is likely to be in the spotlight Tuesday after Bloomberg reported that the German chemicals distributor is considering buying back at least 5% of its shares. 

Oil prices edged higher, climbing to multi-week highs on renewed optimism that China will see a strong economic recovery this year, resulting in increased crude demand from the world’s largest importer.

Crude prices were initially dented by a softer-than-expected Chinese GDP forecast for the year, but data released late Monday showed the Asian giant logged a record trade surplus in February.

The American Petroleum Institute , an industry group, releases its weekly estimate of U.S. inventories later in the session.

By 02:00 ET, U.S. crude futures traded 0.1% higher at $80.55 a barrel, near a three-week high, while the Brent contract rose 0.1% to $86.25, at a five-week high. 

Additionally, gold futures fell 0.1% to $1,850.65/oz, while EUR/USD traded just lower at 1.0676.

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