European Stock Futures Mixed; ECB Retains Dovish Slant

This post was originally published on this site – European stock markets are seen opening mixed Friday, as investors try to digest the competing influences of the European Central Bank retaining its ultra easy monetary policies and losses on Wall Street overnight. 

At 3:05 AM ET (0705 GMT), the DAX futures contract in Germany traded 0.1% higher, while CAC 40 futures in France dropped 0.1% and the FTSE 100 futures contract in the U.K. fell 0.4%. 

The European Central Bank decided at its meeting on Thursday to leave its 1.85 trillion-euro ($2.23 trillion) bond-buying program in place, confirming that purchases will run at an elevated pace in the current quarter. 

While this was expected, President Christine Lagarde also assured the market that pullbacks in this emergency program were not under discussion despite its prediction of a strong rebound in the euro zone economy from mid-year.

This comes as the region starts to get a grip of the latest wave of Covid-19 infections as it ramps up its vaccination program. France, for example, is set to re-open its schools on Monday and lift domestic travel curbs, which started earlier in the month, on May 3. 

Evidence of the improving economic picture in Europe as a whole came from the release of U.K. retail sales data Friday, with the March figure jumping 5.4% on the month, climbing 7.2% on the year, way ahead of expectations.

That said, the handover from Wall Street was negative with U.S. stocks suffering their biggest slide in five weeks on reports that President Joe Biden is set to propose almost doubling capital-gains tax for the wealthy, prompting speculation they may sell shares before any change is made to lock in a lower rate.

Back in Europe, the earnings season continues, with German car maker Daimler (OTC:DDAIF) in the spotlight after it raised its profit outlook for 2021, but warned that the global semiconductor chip shortage may continue to affect sales in the second quarter. 

Elsewhere, Swiss cement maker LafargeHolcim’s (SIX:LHN) first quarter sales rose amid stronger sales across its markets, while French industrial-gas supplier Air Liquide (OTC:AIQUY) confirmed its outlook for this year despite its revenue dipping slightly in the first quarter.

Swedish hygiene products group Essity (ST:ESSITYb) reported a slightly bigger drop than expected in first-quarter operating profit but said it expected Covid-19 vaccine programs to boost demand for many of its product categories.

Oil prices edged higher Friday, boosted by the improving economic conditions in Europe and the U.S., but concerns about the second wave of Covid-19 cases in India kept a cap on the gains.

U.S. crude futures traded 0.6% higher at $61.83 a barrel, while the Brent contract rose 0.5% to $65.72. 

Both contracts are still heading for losses of just under 2% this week on concerns of weakening fuel demand in India, the world’s third-largest oil importer, as the country sets records for daily infections and deaths from the Covid-19 virus.

India recorded almost 315,000 new cases on Thursday, prompting a number of countries, including Australia, Britain and Canada, to restrict the number of flights from the region.

Elsewhere, gold futures rose 0.2% to $1,786.25/oz, while EUR/USD traded 0.1% higher at $1.2026.