European stock futures higher; banking support boosts sentiment

By Peter Nurse 

Investing.com - European stock markets are expected to open higher Friday, with sentiment boosted by moves in both Europe and the United States to support under-pressure lenders, likely preventing a full-blown banking crisis.

At 03:00 ET (07:00 GMT), the DAX futures contract in Germany traded 0.4% higher, CAC 40 futures in France climbed 0.1% and the FTSE 100 futures contract in the U.K. rose 0.8%.

A number of large U.S. banks injected $30 billion in deposits into First Republic Bank (NYSE:FRC) on Thursday, moving to support the lender which had been caught up in the backwash triggered by the failure of two other regional U.S. lenders last week.

This followed the announcement late Wednesday that troubled European bank Credit Suisse (SIX:CSGN) had received a financial lifeline from the Swiss National Bank, strengthening its liquidity as it has struggled with substantial customer outflows after a string of scandals in recent years. 

The European Central Bank raised interest rates by 50 basis points on Thursday, suggesting the policymakers remain confident that the region’s banking sector will be able to cope with more monetary tightening even in these troubled times.

Final CPI data for the Eurozone are due later in the session in a thin calendar for economic data releases, and is expected to show that inflation grew 0.8% on the month in February, up 8.5% on the year.

In corporate news, the banking sector will remain in focus, with Bloomberg reporting that UBS (SIX:UBSG) and Credit Suisse are opposed to a forced merger, a potential solution to the latter’s ongoing problems.

Elsewhere, Sanofi (EPA:SASY) said it would slash U.S. list prices for its most-prescribed insulin product, Lantus, next year following similar moves by U.S. rivals.

Oil prices climbed higher Friday on hope of a response from OPEC and its allies to the week’s sharp selloff on concerns the banking crisis would hurt global economic activity.

Reports indicated that energy ministers from Saudi Arabia and Russia met in Riyadh on Thursday to discuss potential action to support the crude market, which is on course for its biggest weekly loss this year.

The advisory committee of the Organization of the Petroleum Exporting Countries and their allies including Russia, a group known as OPEC+, will meet on April 3.

By 03:00 ET, U.S. crude futures traded 0.4% higher at $68.65 a barrel, while the Brent contract rose 0.4% to $75.03. 

Both benchmarks hit their lowest levels in more than a year this week and are set to post weekly falls of around 10%, their biggest since December.

Additionally, gold futures rose 0.7% to $1,936.80/oz, while EUR/USD traded 0.6% higher at 1.0665.