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European stock futures mixed; PPI data, Lagarde speech in focus

Published 2023-06-05, 02:14 a/m
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Investing.com - European stock markets are expected to open in a cautious manner Monday as investors focus on future central bank policies and more economic data.

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

U.S. President Joe Biden signed on Saturday a bill suspending the debt limit until the start of 2025, removing the possibility of the U.S. defaulting on its debt obligations, a key source of anxiety for financial markets over the past month.

With this in mind, attention turns fully back to what the European Central Bank, and the U.S. Federal Reserve, will decide upon in terms of interest rate hikes in the months ahead as growth slows.

Friday's U.S. payrolls indicated that the U.S. labor market remained strong, although wage growth did slip, creating a degree of uncertainty ahead of the Fed’s next policy-setting meeting next week.

The International Monetary Fund expects the U.S. central bank to continue hiking interest rates at its June 13-14 meeting as banks continue to lend.

“We don’t yet see a significant slowdown in lending. There is some, but not on the scale that would lead to the Fed stepping back,” the IMF’s Managing Director Kristalina Georgieva said on Saturday.

Back in Europe, there's been a slight pullback in expectations for further tightening after last week's data showed eurozone CPI cooling more than expected.

There is more inflation data to study Monday, with May eurozone producer prices expected to show a hefty monthly drop of 3.1%.

Additionally, there are Germany trade numbers and PMI data for much of the European region to digest during the session, while ECB President Christine Lagarde is also scheduled to speak at a hearing before the Committee on Economic and Monetary Affairs.

In corporate news, UBS (SIX:UBSG) said on Monday it will complete its takeover of Credit Suisse (SIX:CSGN) "as early as June 12", creating a Swiss banking giant with a balance sheet of $1.6 trillion.

Oil prices climbed sharply Monday after Saudi Arabia, the world’s top exporter, pledged over the weekend additional production cuts from July, likely tightening the market further in the second half of the year.

The Saudis announced on Sunday its output would drop to 9 million barrels per day in July, a cut of around one million barrels per day from its production levels in May.

This reduction, seeking to boost slumping oil prices, came as the Organization of the Petroleum Exporting Countries and their allies, including Russia, a group known as OPEC+, agreed to extend production cuts into 2024.

By 02:00 ET, U.S. crude futures traded 1.2% higher at $72.58 a barrel, while the Brent contract climbed 1% to $76.92. 

Additionally, gold futures fell 0.5% to $1,959.55/oz, while EUR/USD traded 0.1% lower at 1.0697.

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