European Stock Futures Mixed; U.S. Holiday to Limit Activity By

© Reuters

By Peter Nurse 

Fxgecko.com - European stock markets are icmarkets official website customer areaexpected to open in a mixed fashion Monday in cautious trading, with a Wall Street holiday limiting activity ahead of the release of key U.S. employment data later in the week.

At 02:00 AM ET (0600 GMT), the DAX futures contract in Germany traded 0.3% lower, CAC 40 futures in France climbed 0.6%, while the FTSE 100 futures contract in the U.K. fell 0.3%.

Global markets are starting the second half of the year in a somber mood, with tightening government policies and rising living costs pointing to the elevated risk of the global economy heading into a growth slowdown.

The Eurozone, the U.K., Japan, South Korea, Australia, and Canada as well as the U.S. are likely to fall into recession over the next 12 months, analysts at Nomura said in a note, as central banks looking to restore their inflation-control credibility are likely to err on the side of tightening policy too much even if it sacrifices growth.

Also weighing on sentiment Monday was the news that China’s virus cases continued to climb in some of its eastern provinces over the weekend, raising fears of lockdowns weighing on growth just as the authorities seemed to have brought earlier outbreaks in major cities Shanghai and Beijing under control.

However, activity is likely to be limited Monday given the July 4th holiday in the United States and ahead of the keenly-awaited monthly U.S. employment report.

Recent economic data has added to signs that the U.S. economy, a key global growth driver, is cooling amid aggressive policy tightening by the Fed, so Friday’s nonfarm payrolls report will be studied carefully for how the labor market is performing, given the Fed’s inflation/employment mandate.

Back in Europe, Monday’s economic data slate includes German trade, Spanish unemployment, and Eurozone PPI numbers, while in the corporate sector Spanish energy giant Repsol (BME:REP) is scheduled to report sales results.

Oil prices edged higher Monday as traders digested concerns over a possible U.S. economic slowdown along with underlying supply tightness.

Fed chair Jerome Powell spoke of the central bank’s “unconditional” commitment to reining in inflation last week while also acknowledging the risk of pushing the U.S. economy, the largest consumer of crude in the world, into recession.

That said, oil supply concerns still remain, with Libya facing further disruption due to escalating political unrest, some Norwegian oil workers striking, and the Organization of Petroleum Exporting Countries and allies struggling to make its newly increased production quotas.

By 02:00 AM ET, U.S. crude futures traded 0.3% higher at $108.78 a barrel, while the Brent contract rose 0.4% to $112.09. 

Additionally, gold futures rose 0.7% to $1,813.85/oz, while EUR/USD traded 0.1% higher at 1.0435.

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