European stock markets navigated a varied trajectory on Monday, influenced by the drag of German economic frailty as investors brace themselves for the imminent release of crucial inflation data.
As of 03:40 ET (07:40 GMT), the DAX index in Germany edged up by 0.1%, the CAC 40 in France gained 0.1%, while the FTSE 100 in the U.K. witnessed a decline of 0.2%.
Dismal German Industrial Production Data for June
Market sentiment was dampened on Monday following the disclosure of data illustrating a 1.5% contraction in German industrial production for the month of June. This decline is attributed to the impact of a global demand deceleration, particularly emanating from China, upon the euro zone’s most substantial economy.
Analysts at ING commented on the situation, stating, “A further drop in German industrial production in June is another illustration of the country’s ongoing stagnation. With today’s numbers, the risk has increased that the flash estimate of stagnating GDP growth in the second quarter could still be revised downwards.”
The European stock markets struggled during the preceding week due to factors such as a downgrade of the U.S. sovereign rating, escalating Treasury yields, and lackluster Chinese economic data that collectively dampened risk-appetite-driven markets.
Forthcoming Inflation Data Assumes Center Stage
However, any losses incurred remain restricted, as market participants pivot their attention towards a sequence of inflation metrics set to be unveiled during the week. The anticipation is augmented by mounting expectations that both the Federal Reserve and the European Central Bank are approaching the culmination of their tightening cycles.
Notable inflation figures from Germany and China are scheduled for release on Tuesday, followed by analogous data from the United States on Thursday.
Siemens Energy Witnesses Stock Upsurge Despite Substantial Wind Turbine Setback
Amid the European earnings season winding down, Siemens Energy (ETR:ENR1n) attracted significant attention. The German energy conglomerate projected a €2.2 billion ($2.52 billion) setback within its wind turbine division, thereby contributing to an anticipated annual net loss of approximately €4.5 billion ($5.14 billion).
Nevertheless, Siemens Energy’s shares ascended by 3.9%, rebounding subsequent to an initial slump. The stock experienced this resurgence following the publication of its third-quarter earnings report, which unveiled robust growth in orders and revenue, along with a record-breaking order backlog.
PostNL Stock Surges Following Upbeat Guidance
PostNL (AS:PTNL), the Dutch postal corporation, witnessed a remarkable surge of over 7% in its stock value after revising upwards its 2023 operating profit forecast.
Across the Atlantic, the entertainment sector commands attention, with Walt Disney (NYSE:DIS), News Corp (NASDAQ:NWSA), and Fox (NASDAQ:FOX) all anticipated to report, potentially shedding light on their respective operational challenges. Disney, in particular, has been grappling with a string of disappointing film releases, along with apparent struggles faced by its theme parks.
Crude Prices Remain Relatively Stable Near Four-Month Pinnacle
Oil prices exhibited a slight retreat on Monday, yet continued to hover around their highest levels since mid-April. This persistence follows the recent announcement by prominent producers Saudi Arabia and Russia that they plan to prolong output cuts for another month, aimed at further tightening global markets.
As of 03:40 ET, U.S. crude futures experienced a 0.2% decline, reaching $82.62 per barrel, while the Brent contract witnessed a 0.2% drop, settling at $86.08.
Both U.S. crude and Brent contracts achieved their sixth consecutive weekly gains during the preceding week, thereby marking the lengthiest consecutive winning streak observed since the time span between December 2021 and January 2022.
Furthermore, gold futures sustained a minor 0.2% decrease, reaching $1,971.35 per ounce, while the EUR/USD currency pair observed a 0.2% decline, reaching 1.0992.