European Stock Futures Largely Lower; U.S. Inflation to Guide Fed Thinking

By Peter Nurse 

Investing.com - European stock markets are expected to open in a subdued fashion Thursday, with investors wary ahead of the release of key U.S. inflation data as well as the continued U.K. market turmoil.

At 02:00 ET (06:00 GMT), the DAX futures contract in Germany traded 0.3% lower, CAC 40 futures in France dropped 0.1%, while the FTSE 100 futures contract in the U.K. rose 0.1%.

European equities are set to follow their Asian counterparts lower as investors feared a potential shock from U.S. inflation data after the minutes from last month's Federal Reserve policy meeting showed that the policymakers appeared worried more about doing too little on inflation than too much.

U.S. inflation data due out later in the session could help the U.S. central bank decide the size of its next rate move in November, which markets are predicting to be another 0.75 percentage point increase.

Data released from Germany earlier Thursday showed that consumer inflation in the Eurozone’s dominant economy rose by 10.0% on an annual basis in September, up 1.9% on the month, increasing pressure on the European Central Bank to continue tightening monetary policy.

Elsewhere, the Bank of England has announced it intends to end its emergency bond-buying program on Friday. However, with the new U.K. Prime Minister Liz Truss 'absolutely' committed to her spending plans and gilt yields at their highest in two decades, the Bank may be forced to back down. 

In corporate news, there could well be a European read-across from the news that Taiwanese chipmaker TSMC posted an 80% surge in third-quarter net profit on Thursday, its strongest quarterly net profit growth in two years.

Oil prices stabilized Thursday around their weekly lows, with traders digesting a hefty build in U.S. crude inventories amid concerns of weakening global demand.

Data from the American Petroleum Institute, released on Wednesday, showed U.S. crude stocks rose by 7 million barrels last week, raising fears of sluggish demand at the world’s largest consumer. An official government reading is expected later in the session.

The Organization of Petroleum Exporting Countries cut its 2022 and 2023 oil demand forecasts on Wednesday, just a week after the group and its allies agreed to cut oil supply.

By 02:00 ET, U.S. crude futures traded 0.2% lower at $87.12 a barrel, while the Brent contract traded largely flat at $92.47. Both contracts are down nearly 6% this week.

Additionally, gold futures fell 0.1% to $1,676.10/oz, while EUR/USD traded 0.1% lower at 0.9700.