Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

European Stock Futures Lower; German Retail Sales Surprise Positively

Published 09/01/2022, 02:22 PM
Updated 09/01/2022, 02:22 PM
© Reuters.

© Reuters.

By Peter Nurse

Investing.com - European stock markets are expected to open lower Thursday, starting the new month on a negative note as investors fret about the combination of tightening monetary policy and slowing global growth.

At 02:00 ET (06:00 GMT), the DAX futures contract in Germany traded 0.6% lower, CAC 40 futures in France dropped 0.5%, and the FTSE 100 futures contract in the U.K. fell 0.6%.

Chinese manufacturing activity shrank in August, data from a private survey showed on Thursday, as COVID lockdowns and a drought-driven energy crunch weighed on industrial activity in the world’s second-largest economy and major regional growth driver.

The Caixin manufacturing purchasing managers index came in at 49.5 for August, a drop from July’s reading of 50.4, and below the 50 mark which indicates contraction.

Back in Europe, there was some good news as German retail sales rose 1.9% on the month in July, an annual fall of 2.6%, as consumers in the Eurozone’s biggest economy showed a degree of resilience with discretionary spending in the face of soaring inflation.

Yet, that may just be an isolated bright spot as most central banks are pressing ahead with interest rate hikes as they attempt to combat inflation at historic levels with energy prices soaring.

Data on Wednesday showed Eurozone inflation hitting a new record high, rising to 9.1% on an annual basis in August.

Germany's central bank head called on the European Central Bank to act "decisively" to bring down inflation, and an increase of 75 basis points at next week’s policy meeting is now largely priced in.

Additional economic data scheduled for this session includes German manufacturing PMI for August and Eurozone July unemployment.

In corporate news, Rio Tinto (LON:RIO) will be in the spotlight after the miner agreed to buy out Turquoise Hill Resources (TSX:TRQ) in a deal valued at about $3.3 billion. Rio already owns a 51% stake, while the deal ends almost six months of takeover talks and comes just two weeks after Turquoise Hill rebuffed a lower offer.

Oil prices weakened Thursday, after registering a third monthly decline in August, the longest losing streak since April 2020, as fears that slowing growth will hit global demand have outweighed a sizable draw in U.S. crude stockpiles.

Data from the U.S. Energy Information Administration showed a bigger-than-expected drop in crude inventories last week, falling by more than 3 million barrels, while gasoline inventories fell for a fourth straight week.

By 02:00 ET, U.S. crude futures traded 0.7% lower at $88.96 a barrel, while the Brent contract fell 0.6% to $95.04. Both benchmarks slumped around 5% last month, falling by more than 20% in the three months through August.

Additionally, gold futures fell 0.5% to $1,718.30/oz, while EUR/USD traded 0.4% lower at 1.0017.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.