European Markets Seen Opening Weak

Markets in Europe are expected to open on a weak note on Thursday amidst anxiety ahead of the monetary policy reviews by major central banks and the updates to corporate earnings. Positive sentiment following the softening in consumer price inflation in the U.K. is expected to keep losses in check. Markets would also take cognizance of the updates to producer price inflation from Germany.

Data released just a while ago showed producer price inflation in Germany increased to -0.30 percent in June from -1.40 percent in May. Markets were expecting a reading of -0.40 percent. The reading is however the lowest in 31 months.

Wall Street had closed on a mildly positive note on Wednesday, ahead of major earnings updates. The Nasdaq Composite edged up 0.03 percent to close at 14,358.02 whereas the Dow Jones Industrial Average added 0.31 percent to finish trading at 35,061.21.

Sentiment was mixed at the European bourses as early gains triggered by the lower-than-expected inflation readings from U.K. fizzled in the afternoon session. U.K.’s FTSE 100 finished 1.80 percent higher as the inflation update renewed hopes of a less hawkish stance by the Bank of England. Switzerland’s SMI added 0.15 percent. France’s CAC 40 gained 0.11 percent. Germany’s DAX shed 0.10 percent whereas the pan-European Stoxx-50 declined 0.17 percent.

Current indications from the European stock futures indicate a mixed sentiment. The FTSE 100 Futures (Sep) is trading 0.19 percent higher. The DAX Futures (Sep) is currently trading 0.06 percent lower. The CAC 40 Futures (Aug) is trading 0.12 percent higher. The pan-European Stoxx 50 Futures (Sep) has moved 0.11 percent lower. The SMI Futures (Sep) is close to the flatline.

American stock futures are also indicating weak sentiment, in response to the disappointing earnings updates from the tech sector. The US 30 (DJIA) is close to the flatline, whereas the US500 (S&P 500) is trading 0.12 percent lower.

Asian stock markets are trading on a mixed note in the backdrop of China holding key rates steady. Japan’s Nikkei 225 is trading 1.2 percent lower. Australia’s S&P ASX 200 has gained 0.07 percent. New Zealand’s NZX 50 has added 0.07 percent. India’s Nifty 50 is trading close to the flatline. South Korea’s KOSPI has shed 0.18 percent. Hong Kong’s Hang Seng gained 0.14 percent whereas China’s Shanghai Composite has shed 0.28 percent.

The U.S. dollar weakened, dragging the Dollar Index (DXY), a measure of the U.S. dollar’s strength relative to six currencies, 0.16 percent to 100.12. The EUR/USD pair has increased 0.21 percent to 1.1221 whereas the GBP/USD pair has edged up 0.03 percent to trade at 1.2941.

Amidst the dollar’s weakness, gold prices rallied. Gold Futures for August settlement are trading at $1,986.80 per troy ounce, up 0.32 percent on an overnight basis.

Crude prices edged higher amidst data from the Energy Information Agency that showed a lower-than-expected decline in crude oil inventories in the U.S. Brent Crude Futures for September settlement increased 0.05 percent to $79.50 whereas WTI Crude Futures for September settlement increased 0.05 percent to $75.33.

Due for release on Thursday are Business Confidence reading for July from France and the Gfk Consumer Confidence indicator for July from U.K.

Major earnings updates due from the region on Thursday include Essity, Abbott Labs, Philip Morris, Alfa Laval, SAP, Telenor, Telia Company, Marsh McLennan, Indutrade, SAAB, ABB, AAK, Electrolux, and Givaudan.

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