European stock futures lower; Fed, ECB minutes in focus

By Peter Nurse 

Investing.com - European stock markets are expected to open lower Monday as investors fret over the likelihood of future monetary tightening and the impact on future economic growth.

At 02:00 ET (07:00 GMT), the DAX futures contract in Germany traded 0.3% lower, CAC 40 futures in France dropped 0.4% and the FTSE 100 futures contract in the U.K. fell 0.3%.

Recent lower-than-expected U.S. consumer and producer inflation prints had boosted global markets on hopes that the U.S. Federal Reserve would pivot away from aggressive interest rate hikes.

Several Fed policymakers have sought to temper those expectations, claiming there is still work to do to tame inflation, but the data does point to prices having peaked.

The situation is different in Europe, as the annual reading of Eurozone inflation soared past 10% at the end of last month, up from 9.9% in September.

European Central Bank President Christine Lagarde said on Friday that interest rates will need to be lifted to levels that restrict economic expansion in order to combat inflation at those uncomfortable levels.

This suggests another increase at its December meeting, which would be its fourth successive hike. Since July, the ECB has ratcheted up rates by 200 basis points.

With this in mind, minutes from the ECB meeting and the Fed later this week will provide markets with more direction on the outlook for interest rates, while German producer prices are also due later Monday.

In corporate news, Julius Baer (SIX:BAER) said it was on track to reach its 2022 profitability targets, despite "challenging market" conditions taking a big bite out of its assets under management at the Swiss lender.

Anheuser Busch Inbev (EBR:ABI) could also be in the spotlight after Friday’s late decision by FIFA authorities to ban the sale of alcohol, primarily its Budweiser brand, at the stadiums as the Qatar soccer World Cup got underway on Sunday. 

Oil prices fell to near two-month lows Monday, weighed by demand concerns from China as COVID concerns in the biggest crude importer in the world increased.

New COVID case numbers in China remained close to the highs seen in April, while the country saw its first Covid-related death in almost six months on Saturday and another two were reported on Sunday.

By 02:00 ET, U.S. crude futures traded 0.7% lower at $79.59 a barrel, while the Brent contract fell 0.7% to $86.97. 

Both benchmarks closed Friday at their lowest since Sept. 27, with the U.S. contract down 10% and Brent 9% lower, the biggest weekly decline since August. 

Additionally, gold futures fell 0.4% to $1,747.30/oz, while EUR/USD traded 0.6% lower at 1.0258.