Stocks - Europe Seen Higher; ECB Meets This Week

By Peter Nurse

Investing.com - European stock markets are set to open higher Monday, with investors looking at the possibility of more stimulus as the new earnings season kicks off.

At 2:05 AM ET (0605 GMT), the DAX futures contract in Germany traded 1.1% higher. CAC 40 futures in France were up 1.4%, while the FTSE 100 futures contract in the U.K. rose 0.6%.

Stock markets around the globe have bounced strongly since the depths of March, helped by better-than-expected economic data and large levels of fiscal and monetary aid from central banks and governments alike.

However, the durability of this recovery has been put in doubt by the resurgence of the Covid-19 virus. The World Health Organization reported a record 230,370 new cases in 24 hours on Sunday, with the U.S. state of Florida reporting an increase of more than 15,000 new cases in 24 hours, a record for any state, surpassing the peak hit by New York in April.

With this in mind, attention this week will focus on the European Central Bank meeting on Thursday and then the get-together of European Union leaders, on July 17-18, to discuss, among other things, the proposed 750 billion-euro recovery fund for economies hit hardest by Covid-19.

Helping Monday’s positive tone was the decision of Fitch rating agency late Friday to confirm Italy's credit rating, with a stable outlook.

“Fitch clearly indicated that ECB's PEPP is a key driver for the low financing costs and as such also a backstop for the fiscal position,” said analysts at Danske Bank, in a research note.

The U.S. corporate earning season will start this week, with Europe to follow in earnest next week, providing another window to assess the scale of the damage as well as the recovery, from the pandemic.

There’s little economic data of note due Monday, while in corporate news Credit Suisse (SIX:CSGN) could cut "hundreds" of jobs as part of a new savings program, the Swiss newspaper SonntagsZeitung reported Monday.

Oil prices have drifted lower Monday, ahead of a meeting of OPEC’s technical staff on Tuesday and Wednesday, who are expected to recommend sticking to the timeline for restoring supply to the world market. as demand recovers.

Crude prices have recovered sharply from historic lows in April after the Organization of the Petroleum Exporting Countries and allies including Russia, a group commonly known as OPEC+, cut output by a record 9.7 million barrels per day for three months since May.

The group is due to restore 2 million of the 9.7 million barrels withheld from the end of July,

At 2:05 AM ET, U.S. crude futures traded 0.6% lower at $40.30 a barrel, while the international benchmark Brent contract fell 0.5% to $43.02.

Elsewhere, gold futures rose 0.5% to $1,810.90/oz, while EUR/USD traded at 1.1332, up 0.3%.

Related Articles

Alibaba's Jack Ma sells $9.6 billion worth shares, stake dips to 4.8%: filing

Asian shares climb, U.S. earnings to test dogged optimism

Australia stocks higher at close of trade; S&P/ASX 200 up 0.98%