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European Stocks Seen Higher Ahead of ECB Meeting

Stock Markets2 hours ago (Apr 22, 2021 01:59AM ET)

(C) Reuters.

By Peter Nurse – European stock markets are seen opening higher Thursday, taking their lead from the positive close on Wall Street overnight although gains are seen tempered with caution ahead of the latest meeting of the European Central Bank.

At 3 AM ET (0700 GMT), the DAX futures contract in Germany traded 0.3% higher, CAC 40 futures in France climbed 0.6% and the FTSE 100 futures contract in the U.K. rose 0.5%.

The Dow Jones Industrial Average closed 0.9% higher on Wall Street Wednesday, the S&P 500 gained 0.9% and the Nasdaq Composite ended up 1.2%, as investors resumed bets on reopening stocks, shrugging off a fresh wave of Covid-19 cases in the likes of India and Japan that threatens to slow the global recovery.

Stock markets in Asia have largely pushed higher as a result, with Japan’s Nikkei in particular up over 2%, and Europe is expected to follow suit.

That said, investors could well adopt a degree of caution as the European Central Bank will hand down its policy decision later in the day, even with the central bank widely expected to leave its policy and guidance unchanged.

“The monetary policy meeting of the Governing Council this week is unlikely to result in new policy announcements, however investors will be looking for more clarity on two issues. First, the ECB’s strategy with regards to capping government bond yields. Second, on how the central bank’s views on the economic outlook are developing,” said analysts at ABN Amro, in a note.

The earnings season continues Thursday, and the spotlight will be on Credit Suisse (SIX:CSGN) after the Swiss banking giant posted a first-quarter loss as a hefty hit from the Archegos hedge fund scandal spoiled what would have been its best quarter operationally in at least a decade.

Elsewhere, food giant Nestle (SIX:NESN) confirmed organic sales should grow more than expected this year after strong demand for coffee, dairy and pet care products boosted growth in the first quarter, while SAP (DE:SAPG) stock is likely to be in demand after CEO Christian Klein said the software group had “an absolute blowout in the cloud” in the first quarter.

Oil prices slipped Thursday, continuing to weaken after a surprise increase in U.S. crude inventories added to concerns about growing numbers of Covid-19 cases in India and Japan, the third and fourth largest oil importers in the world.

U.S. crude oil stockpiles unexpectedly edged higher in the week ended on April 16 by 594,000 barrels, the Energy Information Administration said on Wednesday, confirming American Petroleum Institute data from the day before.

U.S. crude futures traded 0.5% lower at $61.03 a barrel, while the Brent contract fell 0.5% to $65.00. Both contracts fell more than 2% on Wednesday, closing at their lowest since April 13.

Elsewhere, gold futures fell 0.1% to $1,791.50/oz, while EUR/USD traded flat at 1.2033.

European Stocks Seen Higher Ahead of ECB Meeting

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