European Markets Brace For Earnings And Economic Updates
European stock markets are expected to trade cautiously on Friday as a slew of data releases across the bloc update investors on the economic growth, price patterns and economic activity. Sentiment would however remain strong amidst the recent positive earnings updates, keeping the markets in high spirits on the last trading day of the month.
Flash GDP data released before hours showed France’s economy stagnating in the first quarter versus expectations of a 0.3 percent growth as the energy price escalation following the war in Ukraine dented household consumption. Previous quarter GDP growth has been revised upwards to 0.8 percent. Annual GDP growth is 5.3 percent versus an upwardly revised 5.5 percent in the fourth quarter.
On Thursday, European markets had rebounded on a strong earnings scorecard that eclipsed the geopolitical stress points. Germany’s DAX led the rally with a 1.35 percent uptick. U.K.’s FTSE 100 rallied 1.13 percent; France’s CAC 40 added 0.98 percent; the pan European Stoxx 600 added 0.62 percent; while Switzerland’s SMI edged up 0.14 percent.
The Wall Street had closed with strong gains on Thursday as upbeat earnings eclipsed worries about the surprise contraction in the U.S. economy. Data released Thursday had shown the American economy contracting at an annualized 1.4 percent on quarter in the first quarter of 2022, versus market forecasts of a 1.1 percent expansion. Nasdaq-100 surged 3.5 percent to close at 13,456.06 and the Dow Jones Industrial Average gained 1.85 percent to end at 33,916.39.
The FTSE 100 Futures (June) is trading 0.90 percent higher. The DAX Futures (June) is trading 0.83 percent higher. The CAC Futures (May) is trading 1.03 percent higher.
Dollar Index, which measures the strength of the Dollar against a basket of six currencies is currently down 0.3 percent at 103.31, after rising to a 20-year high of 103.93 in Thursday’s trade. The EURUSD pair has recovered almost 0.4 percent overnight to 1.0532, while the GBPUSD pair has gained 0.45 percent to 1.2512.
Gold Futures for June settlement gained 0.9 percent and is currently trading at $1,907.70 per troy ounce, versus the previous close of $1,891.30 amidst a spurt in safe haven demand in the wake of the surprise contraction in the American economy.
WTI Crude Futures for June settlement is trading at $105.98, an overnight gain of 0.59 percent whereas Brent Crude Futures for July settlement is trading at $108.25, up 0.92 percent from the previous close, amidst concerns over the impact of the sanctions on the Russian crude oil production.
American stock futures point to mixed trends, with the US 30 (DJIA) index up 0.10 percent and US500 (S&P 500) down 0.22 percent.
Asian markets are in the green zone after a strong rebound in Wall Street on Thursday. Hong Kong’s Hang Seng is trading 4 percent higher; South Korean Kospi has gained 0.83 percent; Australia’s S&P ASX 200 has gained 0.75 percent; New Zealand’s NZX 50 is trading 0.43 percent higher; China’s Shanghai Composite has gained 0.37 percent whereas India’s Nifty 50 has moved 0.27 percent higher. Japanese market is closed for a public holiday.
In economic data releases from the region, France awaits preliminary inflation readings for April. Consensus estimates for the annual inflation reading is 4.5 percent, at par with the previous month’s reading.
The Swiss Retail Sales numbers for March and KOF Leading Indicators for April are also due Friday. Swiss National Bank Chair Thomas Jordan’s speech is also due later in the day.
First Quarter GDP numbers are due from Germany also. The German economy is seen expanding by 0.1 percent in the first quarter of 2022, recovering from the 0.3 percent contraction seen in the previous quarter. Annual GDP growth is seen at 3.6 percent versus 1.8 percent in the previous quarter.
Euro Area’s inflation statistics for April and first quarter GDP would also be making headlines on Friday. Markets are expecting the bloc to expand at 0.3 percent on quarter, as in the previous quarter. The annual reading is expected at 5 percent versus 4.6 percent in the previous quarter. Inflation is seen rising to 7.5 percent, from 7.4 percent previously.
Major earnings updates due Friday from the region are AstraZeneca, Reckitt Benckiser, Saint Gobain, NatWest Group and Smurfit Kappa.
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