European Stocks Edge Lower; Eurozone CPI Data Looms Large

By Peter Nurse 

Investing.com - European stock markets edged lower Monday, with investors digesting weak Chinese factory activity data and a surprise bounce in German retail sales, ahead of the release of key Eurozone inflation data.

At 04:50 ET (08:50 GMT), the DAX futures contract in Germany traded 0.1% lower, CAC 40 futures in France dropped 0.4% and the FTSE 100 futures contract in the U.K. fell 0.2%.

Chinese manufacturing activity unexpectedly shrank in October, with the official purchasing managers index falling to 49.2, from September’s reading of 50.1, data showed earlier Monday, amid new disruptions from COVID-related lockdowns.

China’s manufacturing sector is now back in contraction territory after unexpectedly rising in September, and marked a sluggish start to the fourth quarter for the world’s second-largest economy, and a key European export market.

However, the economic news wasn’t all bad, as retail sales in Germany, Europe's largest economy, posted a surprising recovery at the end of the third quarter, climbing 0.9% on the month, helping it to avoid an early slide into contraction.

The main focus Monday will be on the Eurozone's October flash inflation estimate, which is expected to remain extremely elevated with a 10.2% year-on-year rise, along with the region’s third-quarter GDP release.

The European Central Bank raised interest rates by 75 basis points for the second time in a row last week, saying at the time that it expects to increase rates "further" as it continues to aggressively fight inflation. 

Away from Europe, the U.S. Federal Reserve concludes its two-day policy-setting meeting on Wednesday, and is widely expected to lift interest rates by 75 basis points once more, ahead of Friday's U.S. jobs data.

In the corporate sector, Credit Suisse (SIX:CSGN) stock rose 2.9% after the Swiss bank announced details of its capital hike, raising gross proceeds of 1.76 billion Swiss francs.

Glencore (LON:GLEN) stock fell 1.7% after the Financial Times reported that Tesla (NASDAQ:TSLA) has been in talks with the Swiss commodities group over the electric carmaker potentially taking a stake.

Oil prices fell Monday after the weak business activity data in China added to concerns that a resurgence in local COVID-19 cases will continue to hit demand from the world’s largest crude importer.

China's crude oil imports for the first three quarters of the year fell 4.3% from the same period a year earlier - the first annual decline for this period since at least 2014 - as strict Covid curbs weighed on economic activity.

By 04:50 ET, U.S. crude futures traded 0.8% lower at $87.19 a barrel, while the Brent contract fell 0.8% to $93.06. 

Additionally, gold futures fell 0.4% to $1,638.60/oz, while EUR/USD traded 0.5% lower at 0.9918.