European stock markets are poised for a slight uptick in Monday’s early trading, with investors bracing for a week highlighted by crucial inflation metrics that are set to shape market sentiment in the coming days.
At 02:00 ET (06:00 GMT), the DAX futures contract in Germany displayed a 0.3% ascent, while CAC 40 futures in France exhibited a 0.4% climb, and the FTSE 100 futures contract in the U.K. advanced by 0.3%.
Market Attention on U.S. and China Inflation Figures
In the previous week, European stocks encountered challenges due to a sovereign rating downgrade in the U.S., escalating Treasury yields, and lackluster economic indicators from China, all of which cast a shadow on risk-driven market sentiment.
As a new week commences, market participants appear poised for a modest revival. However, the forthcoming major trials lie in the form of inflation data originating from the United States on Thursday, and from China on Tuesday.
The U.S. Federal Reserve has unequivocally expressed its intent to scrutinize the response of U.S. inflation to its year-long tightening course, using the results to inform a verdict on interest rates come September.
On the flip side, the data from China anticipated this week is anticipated to underscore an economy that is inching closer to disinflation, reflective of a decelerating post-COVID economic resurgence.
Setback in German Industrial Production
In the European context, Germany faces a setback as its industrial production witnessed a 1.5% contraction in the month of June. The decline can be attributed to waning global demand, particularly emanating from China.
During the second quarter of 2023, the German economy found itself in a state of stagnation, missing projections for modest growth. A combination of feeble purchasing power, elevated interest rates, and diminished factory order books collectively exerted pressure on the largest economy within the Eurozone.
Challenging Landscape for U.S. Entertainment Sector
Across European markets, the earnings season is winding down, although notable reports are expected from Siemens Energy (ETR:ENR1n) and Coca-Cola Içecek (IS:CCOLA).
Conversely, the focus intensifies across the Atlantic on the entertainment sector, as corporate giants Walt Disney (NYSE:DIS), News Corp (NASDAQ:NWSA), and Fox (NASDAQ:FOX) prepare to unveil their financial performances amidst challenging conditions. Particularly, Walt Disney has been grappling with a series of underwhelming film releases, further compounded by apparent struggles within its theme park operations.
Crude Oil Steadies near Four-Month Peak
Oil prices underwent a minor dip on Monday’s trading, yet managed to maintain their proximity to the highest levels observed since mid-April. This comes after prominent producers Saudi Arabia and Russia disclosed intentions late last week to prolong output cuts for an additional month, thereby exerting further control over global oil markets.
As of 02:00 ET, U.S. crude futures registered a marginal 0.1% retreat, amounting to $82.74 per barrel. Meanwhile, the Brent contract displayed a comparable 0.1% dip, settling at $86.15.
Both contracts concluded the prior week with six consecutive sessions of gains, marking the lengthiest winning streak since the period spanning December 2021 to January 2022.
Furthermore, gold futures underwent a 0.3% decrease, settling at $1,970.45 per ounce, whereas EUR/USD exhibited a 0.3% decline, currently trading at 1.0981.