European Stock Futures Lower; ECB, Bank Earnings in Focus

By Peter Nurse 

Investing.com - European stock markets are expected to open with small losses Monday, at the start of a week which should see another jumbo rate hike by the ECB as well as quarterly results from Europe’s top investment banks.

At 02:00 ET (06:00 GMT), the DAX futures contract in Germany traded 0.5% lower, CAC 40 futures in France dropped 0.4% and the FTSE 100 futures contract in the U.K. fell 0.4%.

European equity markets are set to start the new week on a negative note as investors fret about slowing growth in the region with the European Central Bank expected to aggressively tighten monetary policy to combat inflation.

A second 75 basis point rate hike by the ECB on Thursday looks like a done deal with euro area inflation at almost 10%, well above the central bank’s 2% target.

That said, data released Friday showed that consumer confidence in the Eurozone stayed close to a record low in October, highlighting the continued risk of a recession this winter as households struggle with an acute cost-of-living crisis.

Economic data due later Monday comes in the form of PMI numbers for October, which will show whether the euro area slid further into contraction territory at the end of the third quarter.

China's GDP rose 3.9% in the July-September quarter year-on-year, official data showed on Monday, quickening from the 0.4% pace in the second quarter.

The data was originally scheduled for release on Oct. 18 but was delayed amid a key Communist Party Congress last week, which ended with Xi Jinping securing a precedent-breaking third term as its leader.

Also of interest this week will be earnings from a number of Europe’s top investment banks, often seen as an important gauge of business health in the region. 

UBS (SIX:UBSG) on Tuesday, followed by Deutsche Bank (ETR:DBKGn) and Barclays (LON:BARC) on Wednesday, while the most hotly awaited announcement is a major overhaul by Credit Suisse (SIX:CSGN) on Thursday.

Elsewhere, Britain’s Conservative Party is set to select a new leader who will become prime minister, the country's fifth in six years, later Monday. Former chancellor Rishi Sunak is the front-runner after former PM Boris Johnson pulled out of the running late Sunday.

Oil prices fell Monday after data showed demand in China, the world’s largest importer of crude, remained subdued in September as its Zero-COVID policy continued to limit activity.

China imported 40.24 million tons of crude oil last month, equivalent to about 9.79 million barrels per day, data released Monday, a week behind schedule, showed. This was up slightly from 9.5 million barrels in August, but still below the near 10 million barrels a day imported a year earlier.

By 02:00 ET, U.S. crude futures traded 1.1% lower at $84.13 a barrel, while the Brent contract fell 1% to $90.41. 

Additionally, gold futures rose 0.2% to $1,659.25/oz, while EUR/USD traded 0.1% lower at 0.9853.