European Stock Futures Higher, Rebounding From Weakness

imageStock Markets46 minutes ago (May 20, 2021 02:05AM ET)

(C) Reuters.

By Peter Nurse – European stock markets are seen opening higher Thursday, rebounding after the previous session’s sharp losses as a receding pandemic allows the region to reopen its economy

At 2:05 AM ET (0705 GMT), the DAX futures contract in Germany traded 0.3% higher, CAC 40 futures in France climbed 0.1% and the FTSE 100 futures contract in the U.K. rose 0.8%.

The major European indices fell sharply Wednesday–with the DAX dropping 1.8%, the CAC 40 falling 1.4% and the FTSE 100 1.2%–after minutes from the Federal Reserve’s April meeting suggested that the central bank officials were considering tapering its asset purchase programs in upcoming meetings.

However, the tone is more promising Thursday as investors focus on the European situation as a standalone.

Authorities across Europe are loosening restrictions as infection rates fall and vaccinations rise. The U.K. largely reopened on Monday, Italy, the original epicenter of the crisis in Europe, will phase out its national curfew in the coming weeks, and tough curbs are gradually easing across Germany.

Additionally, while Eurozone consumer prices rose to 1.6% on an annual basis in April on Wednesday, this figure was still below the 2% threshold that makes the European Central Bank jittery, and nowhere near the levels seen in the U.S.

ECB chief Christine Lagarde said on Tuesday it was “essential that monetary and fiscal support are not withdrawn too soon”, suggesting that the region has a lot less immediate risk regarding central bank policy changes than across the pond.

Also, the volatility attached to the cryptocurrencies, with bitcoin plunging as much as 30% to $30,000 on Tuesday, is not such a factor in Europe as these digital currencies have seen relatively little uptake by the region’s investment community.

In corporate news, earnings are scheduled from the likes of budget airline easyJet (LON:EZJ), retailer Kingfisher (LON:KGF), power network National Grid (LON:NG), Royal Mail (LON:RMG) and defense technology company Qinetiq (LON:QQ).

The European data slate is pretty empty Thursday, but more clues on the pace of the U.S. labor market recovery will come from the weekly initial jobless claims release.

Oil prices edged higher Thursday, rebounding to a degree after the sharp falls of the previous session when traders digested rising U.S. stockpiles, the prospects of more Iranian crude entering the market as well as worries of the Fed tapering back its ultra-easy monetary policies.

U.S. crude futures traded 0.6% higher at $63.72 a barrel, while the Brent contract rose 0.5% to $66.97. Both contracts fell around 3% on Wednesday, to near three-week lows.

Additionally, gold futures fell 0.4% to $1,873.55/oz, just below the four-month high reached the previous session, while EUR/USD traded 0.1% higher at 1.2187.

European Stock Futures Higher, Rebounding From Weakness

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